I received this article this week and I wanted to share it with you. It is amazingly obvious proof that we need to remind ourselves that real estate is cyclical in nature.
The article (or editorial) from March 25, 1982, by Michael J. Mungo of Michael J. Mungo Co., Inc. in Columbia reads:
“Dear Future Homeowners: I am sick of constant news stories about the premature death of the housing industry. The stories remind one of midnight horror shows and are just as fictional. Only the bad or negative is “news”. That’s why death notices are published and not birthdays. A more responsible media would seek to encourage rather than employ funeral scare tactics.
Our government leaders don’t understand the market place so they can’t give you more than a good blank expression.
News and government are not my strong points, but I do know the housing business and a little bit about the American people so let’s look at some FACTS:
1. Some home builders are going bankrupt, but most responsible hardworking builders are weathering this recession because they know in times like this they just have to work a little harder and plan a little better.
2. Homes are 20% cheaper to build today than two years ago because of drastically cheaper labor and material costs. The prices are a result of a concerned industry keeping its people working – not begging.
3. It is the best time in your lifetime to buy a home. Homes are 20% cheaper than they were two years ago and 20-25% cheaper than they will be two years from now when the recession is over and interest normal. It is an unusually opportune time if in buying at these extremely low prices you are careful to get a loan that can be paid out without penalty. When interest rates fall, you will have a home at a bargain price and a reasonable rate of interest.
The future of housing is fine. We in private enterprise have the knowledge and planning to keep the American dream of home ownership ever available and we don’t need a $60,000.00 per house tax payer’s subsidy like Harbison received to do it.
The homes of tomorrow may be a little smaller and in a cluster with others. We’ll build one-story cottages so our older folks won’t have to climb stairs. We’ll be energy and security conscious and make homes expandable so they can grow with families and incomes. So keep your petunia seeds and rose bushes because owning your own home is as real as ever.
We live in a great and resilient country. Nothing but ourselves can long stop us. We must not be frightened to immobility by doubts of little people. Don’t listen to disbelievers who would rob you of your dreams – False prophets have been with us always – We would still belong to the British if the thinking of those fearful types prevailed.
America is vision, determination, positivism, and realization. We need only to believe in ourselves and our system and it will always work.
This letter is not an advertisement because fortunately we have more than our share of the market. It is hopefully an encouragement that we Americans have an incredible ability to always rise above the din of mediocrity and make things turn out right. I have spent this money [on this editorial] to correct false impressions and because I believe in our system and in you and me.”
