Three Years Ago This Week

Three years ago this past week - on December 12, 2019?- a cluster of patients in China’s Hubei Province, in the city of Wuhan, began to experience the symptoms of an atypical pneumonia-like illness that did not respond well to standard treatments, marking the beginning of the COVID-19 Global pandemic that has been associated with the deaths of over 6.6 million people with about 650 million cases recorded.....over 1 million deaths in the US. Of those about 28% were aged 85 years and older,?51% were between ages 64 and 85, and 25% were aged between 30 and 64 years of age. About 180,000 health workers have died globally from COVID.?The seasonal flu causes between 294,000 and 518,000 deaths each year globally according to the CDC. The cost of COVID exceeds $12 trillion globally.?

Looking back allows us to see 'the big picture' more clearly. Today I won't dare touch all the issues around how this pandemic was handled by governments, corporations and individuals: I'll address the impact on real estate and some lessons I've learned about how COVID impacted our world....over 3 years, not 3 months or 3 weeks:

1.?Most predictions are guesswork. I was almost CERTAIN with strict lockdowns and 100% consistent mask-wearing, we could beat this within a few weeks/months. I was wrong. VERY wrong.

2.?Life goes on.....ALWAYS. Marriages, births, deaths, divorces, etc paused for a few moments - at best - and then continued.

3.?Markets can dip and recover quicker than one might expect. The S+P 500 was just about $3,200 in December 2019, dipped to $2,300 in March 2020, and returned to $3,200 about 3 months later even while lockdowns persisted (markets tend to look forward first). While the S+P 500 is now around $3,800, that's up about 16%, even after an approximate 20% decline in the past 12 months.

4.?Stopping anything often requires a LONG time and LOTS of effort to re-start. Re-starting many areas of industry after the 2008-10 Great recession took YEARS. Steel production capacity plummeted from 90% to around 33% and took several years to recover. In the 2008-10 recession home building lost about 50% of its labor force triggering under-building for the next decade and rising costs. Cutting home construction capacity now will take many months or even years to recover. And make construction more expensive.

5.?The desire to recover and make up for lost time is always exaggerated during moments of deprivation. Deprivation fuels desire.

6.?Healthy homes and lifestyles are ALWAYS good for you. Healthy immune systems - and all systems that address prevention - are always good. The concept of prevention - rather than cures - was highlighted. Health is the ultimate wealth.

7.?We re-discovered - or were again reminded of - the importance of nature. Nature in all its forms is good for the body and mind.....and our homes. Everything from a simple house plant to a magnificent garden grew in popularity. And we re-realized the importance of nurturing and taking care of our planet.

8.?We learned that RE-ACTIONARY real estate moves are often foolish. ACTING with purpose and a strategy are usually much wiser. Some who predicted the demise and destruction of cities were proven wrong. Those who acted, buying quality when many were fearful, were handsomely rewarded. Some realized living in the middle of nowhere is not for everyone. Making longterm commitments to new places requires careful consideration. Following the herd often leaves you lost in the herd.

9.?We discovered places to live many thought were never an option. Suburban life can be wonderful! Yes, there is a life outside of New York and Los Angeles too! Working from home - or anywhere - is a viable option for some, not all. We discovered many miss the office, but not the commute. People need people, especially when growing a career. Zoom people are a different kind.....

10. The world became significantly more aware of high taxes in areas and asked what exactly they were getting in return for those high taxes. Others were reminded that nothing is free and that some areas with lower taxes deliver less or have lower quality things that matter lots to some, and not others. Everyone realized the importance of a quality education.

11.?The world was reminded that TIME IS THE LAST LUXURY, and many plans were accelerated: moves, retirements, buying or moving homes instead of waiting for that perfect moment, etc.

12.?We saw that when workers earn more, the economy SOARS. Industry was woefully unprepared for this demand surge. What was interesting was that when the masses earn more, they spend more, almost immediately (unlike wealthier people who often can afford everything they want/need already). Imagine had we had outstanding supply to keep prices in check. We also saw how when the masses spend more, the rich get EVEN richer!

13.?We saw how corporatism is often a much greedier version of capitalism: many corporations raised prices well beyond rising costs....because they could.....further fueling inflation that will now lead to many losing jobs and suffering as the FED tightens money supply at an alarming rate.

14.?We learned that as a society we have a lot of work to do in our ability to unite against a common enemy ....or for a common goal. United we stand....?

15.?We saw how the media cared much more about scandalous headlines than reporting complete facts and providing context, often fueled by equally divisive politicians and their enablers. Real Estate media was no exception.

16. We realized that those cheap imports we love so dearly are very expensive when you cannot get them delivered, including many building materials. We realized just how much of what we consume travels thousands of miles. We also realized that making these things locally will cost LOTS more.

17.?We saw how trade tariffs are paid for by consumers, not industry, as are all rising costs.

18.?We saw herd mentality at its extremes, especially amongst speculators. Those that purport to be individuals and independent thinkers were proven to be quite the contrary. BITCOIN - which started to be used in real estate was about $7,300 in December 2019, soared to over $64,000 in November 2021, and is now trading around $17,000.

19.?We saw massive fraud and corruption exposed (while many got away with it): there will always be parasites taking advantage of 'the system'. Even some 'top brokers' made headlines to sell VIRTUAL real estate. The narrative of the under-privileged was used as a ruse by Organized Crime. The press loved it!

20. History repeats itself. Massive spending and borrowing led to massive inflation. We saw extremes boldly in politics. And other societal divisions around race and religion.

21. We were reminded that massive surges or declines are usually temporary or transitory events, each simply timed differently. Our increasing impatience urges all to be resolved fast, and that may simply be unrealistic. Maybe it's time to rediscover 'years' instead of 'days/weeks'? Patience and perseverance pay.

So maybe the past 3 years are more akin to World War 1 that heralded to start of the Spanish Flu that caused mass mortality destruction and division. This period was followed by massive inflation. Which was followed by massive deflation to correct the extremes.

Will history repeat itself? If so, maybe the ROARING 20's Part 2 - fueled by technology - are in our not-too-distant future too?