But what does all this imply as an answer to the question of whether we ought to wring our hands in grief, not to mention abandoning much thought of entering into a real estate transaction?

Well, permit me to hold forth, as is my (frequent) way ...

Nothing is forever

If, as I'll always argue, real estate ought to be a long term affair instead of a chance to make a quick profit, the current downturn is, in my opinion, going to have a limited duration.  The mere fact that some people are compelled to sell and others have an urgent need to buy doesn't -- and cannot -- mean that the real estate business has reached a grinding halt and, for all practical purposes, isn't going to rise from its present ashes (even admitting that the range of possible fire sales has such a dire meaning).

No, there's a constant need for a roof over our heads or a place from which to run a business.   The locations and prices may change -- be it for the better or the worse -- but life has to go on, and one of its absolute essentials is shelter from the elements.

Of course, in our part of the world -- including other nations that are affected by a repeat of America's erstwhile Great Depression -- things aren't as critical as in countries with poverty stricken populations.  Even there, though, time alone will see the emergence of local real estate offices and agents.  Vacuums are an open invitation for entrepreneurs to seize the opportunity to fill them, however long it takes.

Yes, real estate can have its cycles, like all businesses do, but it has a life of its own with no end in sight.

 

Although parallels have been been drawn with the 1930's -- and not without a degree of justification -- there is, in my view (and I don't think I'm alone in holding it) -- a much more enlightened approach to turning things around this time. 

Unfettered free enterprise had something to do with the earlier collapse of America's economy (with a spread beyond its shores akin to the present international repercussions), and F.D.R. had to turn government on its head before federal help was applied to stem the flood of job losses and financial failures.  In contrast, though, today's challenges, while perhaps greater than before, are being faced with an atypical recognition by Republicans, Democrats, Conservatives, Liberals, and other political believers alike that something simply must be done.  No one considers that the market should be left to its own devices to cure what's wrong. It's going to call for government intervention -- no doubt rapidly and perhaps drastically -- to staunch the loss of business and consumer confidence.  Whatever the benefits and achievements of capitalism, it has some limitations and among them is an ability to always take care of the common good.

In any case, President-elect Obama seems to have touched nerves and pressed buttons that will earn him fairly universal support in his plans and intentions to bring America back to where it should be.  Similarly, our prime minister appears to have learned a lesson (even if he's yet to apologize for the wrongheadedness in his pre-Christmas budget proposals!) and accepts that our economy needs a bi-partisan handling no less than in the U.S. House and Senate -- and my guess is that Michael Ignatieff will rein in the prospect of a possible coalition and share in a sensible attempt to limit/overcome our difficulties as opposed to playing politics .

Much the same attitude is apparent in the U.K., Europe, and Asia, where the effects of America's downturn are being felt.

Thus, if only because I have an abiding interest in economics and politics -- even though it includes an often jaundiced view of what parliamentarians can get up to -- I do have confidence in the current political focus on bringing commonsense to what needs to be done.   Things may indeed get worse, but I have a clear hope that they will get better -- and maybe much sooner than the naysayers may think.

 

In any case, I fully expect that politicians either side of the U.S. border will have a common purpose -- a determination to improve things from what they are.  

 

c)   As far as a commercial site is concerned, I don't see any argument for holding back.  On the whole, this is a much slower segment of the market and prices are far more dependent on due diligence findings than public (mis)conceptions and economic variations.

d)    Regardless of all else, the key factor is NEED.  If you MUST sell or buy without delay, then do so -- and don't worry about it for a second!

 

With my very best wishes for 2009 -- whatever is going to happen to us.