Real Estate only became valuable because of a mindset. To grab whatever you can, and then keep the next generation from having any.
Look how Spain and England went around claiming lands. Lands that were never theirs, could never be theirs, but they acted like they were the legal owners of it. And then went around beating up anyone who might say something different. Physically and legally.
Imagine creating a world where the next generation has to compete with all the previous generations for a spot on the earth they can call their own. There is so much space on the surface of the earth, but we deny people from using it, for "reasons".
The youngest generation is not buying into these reasons, and they will live in a world very different than what Gen X and the Millennials grew up in.
- Demographics is collapsing. There will be so many empty properties that acquiring a dwelling will be about finding an empty one you want to move into.
- Change in needs. We will no longer need houses close to factories / cities. The youngest generations will not know of "driving to work". Telecommuting is only the start.
- Change in desires. People will realize that they need to be close to the land. And with no need to be in a city, they will disperse over a much larger area.
- Reached peak financialization. Our current problem of the youth not being able to afford houses is because everyone before them have financed to the limit. You can't get lower than 0% interest, and longer than a 30 year mortgage just becomes renting from the bank. You can't borrow more unless you have much higher paying jobs, and those don't exist.
We have reached the end of an era. There will be no more mortgages. There will be no more struggling to get a house. There will be no more Real Estate market.
Real Estate is now in free fall
The pundits are saying that it is just a slump in the market today. The real estate realists are saying we are seeing another 2008. However, i am saying that we are at the beginning of real estate going to zero.
The boomers are going to dump all their houses on the market over the next few years. And they will be cashing out their REITs.
Boomers own 25% of the houses, and almost 50% of the home values. And there isn't enough money, collectively, in the younger generations to pay for those houses. There isn't enough people in the younger generation to fill up those houses.
In California they are going to socialize all the housing… of course, those who own houses, still own them, they just won't be able to kick tenants out, and that ends with the houses being unsellable.
If boomers wait too long, they won't be able to give away their houses. Look at what we are seeing in the Commercial Real Estate market. Million dollar buildings being sold at 10¢ on the dollar. And that's a good deal. Waiting longer will get you nothing.
And this future happens if everything about cities stays the same. Which it is not.
The biggest misallocation of resources
The houses we build are stupid, uneconomical, poorly planned and not suitable for living in. This is about to change as people realize that there is a better way.
Better way? * Multi-family houses that are designed for raising children, instead of having each child trapped in a "house" by themselves. * Passive heating and cooling is a must, the bare minimum. * Well insulated and built to last a century, minimum. * Designed to fit into the surrounding landscape, instead of just bulldozing everything flat, and then having a big street, and little front yards. * Buildings designed to be walked in between. Get the cars out of there (we will have flying cars anyway). A very important thing about a community is having the people close enough to interact daily with others. If you have to get in a car to see your neighbor, they are too far away.
Basically, all of the suburban ticky-tacky automobile slum will be considered by most in the future, unlivable.
Even if it is free, it will cost too much.
Real Estate, the concept, will be abolished… with extreme prejudice
We do not inherit the earth from our ancestors, we borrow it from our children.
Ownership of land, in the future, will be mostly based on who is currently care-taking it. And you can only "own" as much land as you can maintain.
This has many implications. The biggest being that there will lots of land available for someone to start taking care of. A young person will not have to wait until they make a small fortune to get some land.
The ideas that you can own land just because you have the most money will seem silly. Denying a person land will seem the ultimate in bad ideas.
The child who is not embraced by the village will burn it down to feel its warmth
As you can see, the entire premise behind Real Estate (the king's estate) will be considered silly. And the next generations will not follow it.
Land might be considered in asset, it is the stuff with which you grow food, however, it will not be a sellable asset. It will not have monetary value, but it may have intrinsic value.
All of Billy Gatez' land will be divvied up to future farmers who will rejuvenate the soil.
As you can see, we are not at another 2008, we are at the beginning of the entire idea behind "Real Estate" being dismantled.
The guys who are trying to tokenize real estate do not realize that they are too late. They talk about people being able to split ownership of a house, so that people can buy slices of real estate. We should realize that no one can live in a piece of a house, and that denying people shelter is a really bad idea, with only bad futures.
But, real estate values will drop faster than these tokenizing people will be able to get their system set up, and people using the system.
The suburban Mc'Mansion is the past, the future will be about small communities on homesteads. Or, basically, there will be acres of abandoned suburban houses.
All images in this post are my own original creations.