I think in order to understand what the housing crisis is and was, we need to take a look at what a crisis is and why we react so fearfully to the economic ebb and flow of the natural market. Wikipedia states that a crisis “may be a traumatic or stressful change in a person’s life, or an unstable and dangerous social situation, in political, social, economic, military affairs, or a large-scale environmental event, especially one involving an impending abrupt change. More loosely, it is a term meaning ‘a testing time’ or ’emergency event’.”
I believe that the housing bubble bursting is a continuation of a pattern that we first saw with the dot com era. If you look at a chart of the NASDAQ during the late 90’s into the early 2000’s, you’ll notice a high swing in prices and a quick drop. Look at the real estate market and you’ll see the same thing only a few years later. What’s the next bubble to burst? Wouldn’t it be where the skeptic investors have run off to to make another quick buck? Life isn’t about making quick money, even if some people have nearly perfected the craft. It is about finding balance in everything you do.
Everything we experience on this planet occurs in natural waves and patterns. A time-lapse video of the sky shows a curious development of what appear to be water-like waves as the clouds move by. The patterns, although random per snowflake, are still patterns with a semblance of symmetry. What goes up must come down. If it swings left, it will swing right.
A pendulum only swings after it has been unnaturally pushed from a stable point to a left or right extreme. Once you let go of it, it will swing back and forth until it finds balance.
Our real estate crisis is a perception fear hyped by the media. Banks unnaturally pushed the pendulum to one side, and now we’re swinging, just as expected by those of us who ignored the doom and gloom reports. There’s nothing to be afraid of.
According to Cyril Moulle-Berteaux of the business coaching toronto, “it is very likely that April 2008 will mark the bottom of the U.S. housing market.”
…to be continued.