As yesterday we explored the tip of the iceberg if you will looking at the viral aspects of how the automobile was an enabler to an amazing 50 year plus housing boom which just now has turned to bust. As the interesting thing is improvements in the speed and comfort of the car allowed people to migrate further and further afield away from their urban working environments. In turn this supported more and more construction of new homes promoting suburban sprawl, this action in turn also supported the automobile to create an innate tango if you will weaving back and forth just as a young couple in love.
However the “young couple” is now past their prime and even the golden years would look good to them as both now find themselves laying in intensive care as they sip quietly from their respective respirators as they dance no longer. In the meantime it appears the Obama “Death Panels” just can’t bring themselves to pull the plug on the two darlings as the perceptions of their dance floor greatness is still too much of an aphrodisiac for them to let go of.
While rightfully a poetic ballad, the reality is still the same as the retiree we spoke of yesterday who is trying to sell his $450,000 home for $290,00 and will be lucky to get a mere $200,000 ,meaning he paid a fair price to live in the house however will receive nothing more. As we’ve waxed on these pages in the past, the American dream was you bought a house, worked for 30 years paying off the mortgage which was the tool to bind you to indentured servitude only to receive a pot of money at the end when you sold your largest investment. Yes, are young couple as they danced promised us this, the world would forever grow and grow, therefore the need for “forever” more was assured.
So what does this mean to you and me, the answer is simple however harsh within our belief systems as it requires “change” and that as we all know is not easy as we fear what is hidden behind the hill we cannot see over which makes the unknown always appear as dark as space. First the housing market will not come back, you can elect any president or party you want the stark fact is far more people are dying then being born as the Boomers have made their last push and now are singing their last song, which will be that of the swan. Therefore no demand, no market so saying it just needs a little help is a kin to lying to ourselves in a way that a severed arm only needs a Band Aid brand band aid to stop the bleeding.
Urban centers no longer matter, as the internet has placed a super highway in our living rooms so why do we need to congregate in some 100 story glass and steel monolith only to take our work home with us anyway? Also we no longer need the connivance of a brick and mortar store as logistics services will improve on convenience while adding variety and injecting efficiency to the mix. As you if you think about the existing brick and mortar logistic chain is no different other then ”you” at an expensive rate provide the “last mile” service which is wasteful. Also we will get past “missing” the touch and feel just as I’ve gotten past missing the “Dime Stores” and candy counters of a later time.
As will we still need homes and cars, well of course however going forward we need to expect to pay for them as the free ride of implied appreciation is now nothing more than a vision in the review mirror…