Boom or Bust

Cautiously optimistic.

That would be the general feeling and sentiment around those in the business community.

On the one hand, all of the fundamentals are sound.  The economy is firing on all cylinders.  Unemployment is low.  Housing is strong.  Lots of innovation.

And yet.

The sentiment is continuing to lean further and further towards the “cautiously” part of the saying.

Because we all no the forces working beneath.

And they aren’t angled towards the next decade.  But rather today, next week and next year.

Our incentives are geared towards the short.  They align us with decisions that are great for us in the present.  With less concern about the prospects of the long term.

Loans are taken out based on what someone is paying today.  Not tomorrow.

And the developer is not typically doing the long term holding.  The buildings built today are meant to be sold within 2 to 3 years.  So costs are cut.  Cheaper materials used.

A broker is paid at the time of the sale.  Right upfront.  Not on the back end.  The long term is moot.

So it’s no wonder we are stuck looking in the rear view mirror.  Looking over our shoulders.

Because we see the incentives.  We see how much we are driven by the short term.  To continue to try and grow.  To continue to get bigger.  To keep justifying a higher price – until it’s too late.

Bust shows up when the boom ends.

Are you ready?

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