Book: Are You Missing the Real Estate Boom?

One of the reasons I read is to step into lost worlds. Nero Wolfe’s New York, Bertie Wooster’s London, and Don Fabrizio’s Sicily are all places that reward the wanderer. And though such worlds never really existed, I suspect they are close enough to ones that did to spark recognition in the eyes of those who lived in them, were they still alive.

Now most of the lost worlds accessible through literature are at least somewhat remote in time, otherwise they would not be lost. But sometimes the world changes so quickly, and so drastically, that a book written just a few years ago can seem like a dispatch from the distant past.

Mr. David Lereah has, inadvertently, given us such a book. Before you rush out to get it, I should warn you that Lereah’s writing is not up to the standards of Stout, Wodehouse, and Lampedusa. Being an economist rather than a writer, Lereah could be forgiven for not reaching such heights. But he’s probably not such a good economist either, given what he chose to say.

Cast your mind back, if you can, and you are old enough, to the mist-shrouded halcyon days of 2005. Sure, there were problems. War. Terrorism. Deuce Bigalow: European Gigolo.

And the stock market, of course. Still suffering from the burst bubble, it just wasn’t bucking us up the way it was supposed to. But the world was still a light-filled wonderland thanks to one plucky little sector of the economy. So incredible was its performance that some of the residents of that vanished land might have seriously asked themselves the question: “Am I Missing The Real Estate Boom?”

They might even have capitalized all the words, who knows, 2005 was a strange place. Of course, David Lereah never asked himself that question. As an economist for the National Association of Realtors, he and the boom were bosom buddies.

But he was worried. Not about housing prices, never! Those would keep going up; what else could they do? Was there any other direction, really? But what of the people who were missing the boom? Those for whom the boom was but a ship in the night — who would save them?

So he wrote a book and he called it “Are You Missing The Housing Boom?” And just for good measure, he gave it a sub-title:

Why Home Values and Other Real Estate Investments Will Climb Through the End of the Decade – And How You Can Profit From It.

Whew! After that why even bother writing the rest of the book?  Well, he was (and perhaps, though not with any justice, still is) an economist, so he threw in lots of dry statistics and graphs to show why the boom would keep going up. As if there was any doubt.

And he filled up chapters with checklists for what to do when you finally stopped being stupid and decided to invest in real estate.

Oh, the choices. You could by a primary residence (Chapter 6), a vacation home (Chapter 10), or a rental property (Chapter 9). You could spend money on home improvements (Chapter 7) and trade up for a bigger one or down for a smaller one and cash (Chapter 8). You could even buy shares in some wonderful new things called “mortgage-backed securities” (Chapter 11, I’m not making this up). Doesn’t really matter, you just can’t lose.

He also warned us of the dangers of that other so-called investment, the stock market. Wild and unpredictable, it had the annoying audacity to sometimes go down instead of up. Might as well just burn your money. But there’s something else about the stock market you might not have known. Unlike real estate,

The values of stocks and bonds are subject to the sways of the terrorist pendulum.

Wait, the terrorists have a pendulum? Is it like the one in The Pit and the Pendulum which inches towards us with each sweep of its terrible blade? Or will its incessant ticking slowly drive us all mad? Do they have to wind it?

These are deep waters. Let us return to the security of the only investment that’s safe as houses.

But how did he know the boom would keep on keeping on? Lots of reasons, that’s how. Demographics, market fundamentals, people just like houses! Just looking at the home supply, he was struck:

Based on historical data, it would be difficult to concoct a scenario in which home prices retreat under such lean housing conditions.

Problem solved! Where imagination fails, reality steps in to save the day. Thanks, reality.

What a time it was, that “Golden Age of Real Estate”. Thank you, David Lereah, for taking us back there, if only for a moment. It almost seems like yesterday. Ah, well, back to the dreary present.