Dennis Norman Musings

Dennis Norman

 By: Dennis Norman

I realize the “housing bubble” has been written about way too much and people are probably getting tired of hearing about it, especially after all the financial pain it has caused so many; particularly investors and developers.  However I came across a couple of interesting things today that got me thinking about it again and lead me to some interesting information which I would like to share.

Earlier today I happened to come across a post I did back in January about the “soft landing” that former National Association of REALTORS(R) chief economist David Lereah had predicted.  In that post I touched on the bubble and discussed it a little but focused mainly on David Lereah. 

Reading this post made me ask myself, “why didn’t I see that we were in a bubble?  How could I miss something so obvious?  Wait, forget me, how about all the brainiac economists, bankers, institutional investors and the like out there that missed it?”. 

I then remembered that in fact,at my real estate development company, during 2005 and 2006 we were discussing the housing market and how it was on steroids and would not last forever.  We discussed how to position ourselves to be prepared, not get caught “with our pants down” and, after the market  does take a turn for the worse, how to be in position to swoop in and take advantage of the market, buying up all the bargains that would definitely be there.

Unfortunately, in spite of my awareness of the market and it’s ultimate downturn, I failed to recognize or appreciate the fact we were truly living in a “housing bubble” and it was going to burst as opposed to the “slow deflation” Lereah suggested.  If only I could have realized it was truly a bubble and acted quickly and aggressively I could have potentially saved millions of dollars in lost real estate values.

OK, I can see already this is going to be a long post, but I want to include a lot of information that I think is informative from both a historical aspect as well as for a lesson moving forward.  Therefore I’m going to stop here for today but tomorrow will pick up where I left off.