Greer and I got into a side conversation in the comments to Mentats Wanted, Will Train--real estate. Even though I had plenty of things to say about the main topic, that's what he responded to. It began with the final remark of his that I included in my first response.
Greer: When all the people you know are rushing to sink every dollar they have in the speculative swindle du jour, for example, you’ll quickly recognize the obvious signs of a bubble in the offing, walk away, and keep your shirt while everyone else is losing theirs.Those of you who have been reading my blog for the past three years should recognize that I put together two stories about selling my house that I usually tell separately, but managed to weave together for the first time in Math and the market. Even that version gives the deer half of the story short shrift.
Me: I had that experience with real estate. The news on the radio in June 2005 trumpeted record home sales and prices. I took it as a sign of the market top I'd been looking for since 2001 and immediately drove to the nearest real estate office to my home in the Irish Hills of Michigan and listed my house for sale. The house sold in April 2006 and closed in May 2006, just as the bottom was about to fall out.
That was not only good for me, but good for the deer. That winter, the deer ate my shrubs up to the seven foot level. Good thing they were eight feet tall at the time. I vowed that if I were still in my house the next firearms deer season, I'd finally break down and buy a rifle and a deer hunting license. I never got the chance. Lucky deer.
Back to the conversation about real estate.
Greer: Pinku-sensei, I did the same thing with real estate, the other way around. My wife and I stayed completely out of the real estate market until 2009, when prices had crashed good and proper but credit could still be had, and snapped up our current house for an absurdly small sum. Having a clue really does help!Yes, I threw in a bunch of my favorite lines about Detroit. How could I resist?
Me: "Having a clue really does help!" Yes, it does. Now to see about buying property as it struggles off the bottom.
Greer: Pinku-sensei, in your place -- unless relocating to the Rust Belt is part of your plan -- I'd build up a sum of ready money, and wait for the fracking bubble to pop. My guess is that there'll be panic selling of quite a range of assets at that point, and you'll do quite well.
Me: I relocated to the Rust Belt from California 25 years ago. Right now I'm only 4 miles north of Detroit. I find getting an up-close-and-personal view of a city undergoing collapse perversely invigorating. As I say, welcome to Detroit, Ground Zero of the Post-Industrial Future. The solutions to North America's problems will be developed here first and then exported to the rest of the continent. That means the locals have a responsibility to promote the good solutions and squash the bad ones. May they be able to tell the difference.
Greer: Pinku-sensei, somehow I managed to forget where you were located. That being the case -- well, depending on where you want to invest, vast tracts of real estate can be yours any time you want!I hope he's right. In the meantime, since it's entertainment-themed Sunday, I can indulge in the first thing that came to mind when I read "vast tracts of real estate." Take it away, Monty Python!
I'll get back to the rest of the conversation, as well as at least one other entry about Apophis Day later. It's a beautiful day, and I need to get out and cultivate my garden.