@Kai Van Leuven
The fact that this post has generated a diversity of responses from all kinds of investors makes it a good one regardless of what anyone here thinks of it.
But, is this post a product of today culture of “content creation”? We all want to have that very creative post that (triggers) stimulates everyone’s reaction. Many others want to come up with bold predictions that may or may not matter, or make or not make any sense as long as is controversial.
Regardless of where this interesting well put together post come from or its intentions, it is a good one and brings to light a very good question.
The apocalyptic ending of the real estate industry as suggested in this post would be far, far, far from happening if ever. Who knows? Those who know, or believe to know, would be betting everything in their possession to cash in on it. To the last square inch in their name.
What your post fails to recognize is what real estate really is. The land and its natural resources and artificial structure will always be in demand. We need land for farming, manufacturing, logistics, housing, recreation, et cetera.
Comparing San Francisco, Dallas, Phoenix, New York City, Orlando, Boston, Tennessee, Los Angeles and to a small lead mining town would be preposterous. But that’s not the comparison that Kai used. Let’s look at few examples (concerns) in the post.
Driverless cars. Or other jobs being replaced by technology. Automation?
More than a hundred years ago we started replacing horse pulled cars with electric cars. Yes! Electric cars. It wasn’t till Henry Ford and the Rockefellers introduced the combustible car that we started using oil to power our motor vehicles. The only people who lost business were those in the horse carriage business that refused to adapt to the new changes.
Approximately 30% of car manufacturing jobs since the 80’s have been lost to automation. Alternative energy has eliminated coal mining jobs. Technology has eliminated many farming jobs (almost all of them). The number jobs in the rail road industry has decreased percentage wise since the late 1800’s because of automation.
We have lost millions of manufacturing jobs since the 1980’s and at a very fast pace since NAFTA was passed in 1993.
The entire industrial revolution eliminated millions and millions of jobs over generations, but on the same token it creates many many more.
Basic income? Stagnant income?
I am not an economist, but numbers seem to indicate that since the 70’ wages have not kept up with productivity nor inflation.
Now, many cities and states around the country have taken the initiative to increase the minimum wage. It’s only a matter of time before the federal government decides to increase the national minimum wage. It regardless of all this, millionaires are popping up literally everyday in this country. The way we make money has changed tremendously in the last 20 years. Who would’ve thought that an entire family with no skills whatsoever would make billions of dollars originating from a “leaked” sex tape from one its members? Just through reality television, sponsors, cosmetic products and social media. Speaking of social media, there are literally children making millions of dollars through social media apps as I type this. Many jobs and industries have been created during the last generation.
Can real estate fail?
The real estate industry has stood the test of time and cultural changes. The ups and downs of economies. Yes, real estate can fail in pockets. Take Michigan as an example of what can happen when an economy dependent on one specific industry loses that industry. Small lead and coal mining towns would be other very specific examples. Coal mining has been on a fast decline since the 70’s. Who knows what would happen if Silicon Valley corporations decided one day to move to...... Luxembourg? And most of its employees decided it would be best to virtually work from Wisconsin or somewhere in the Midwest. Yeah, real estate would fail in SILLICON VALLEY. That has happened many times in small pockets. When little lead mining town failed New York City didn’t even notice. Not Miami or Phoenix.
In conclusion I might be overly optimistic about real estate. I found it irritating every time you join a real estate group, forum or meeting and there is the one person or people that want to know “when is the next recession happening?”, or what are the speakers or members of the group doing to prepare for the next apocalyptic economic downfall. This question/topic of the next recession is now starting to become a synonym with real estate investing.
