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A Crisis in Confidence

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As True Today as 30 Years Ago

It is a crisis of confidence.

It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation.

The erosion of our confidence in the future is threatening to destroy the social and the political fabric of America.

It’s amazing how some things have changed little in the span of a generation. And it’s also amazing how much different many things are now compared to then.

When President Carter spoke of spiraling gas prices, regular – real regular, not the then-oxymoronic regular unleaded – had crept over a dollar a gallon. I still remember not only the first time I saw a one appear on a gas station price board but also my mother’s reaction. You would have thought the world had ended.

Fast forward to today when it was with a wry smile I noticed that I’ll be filling up my tank tomorrow at around $2.97 a gallon – still exorbitant, but a far sight better than the $4.57 I spent in San Diego in late June on a return from Legoland.

On the flip side, I recently heard from a buyer who repeated what I’ve heard on and off for the last year and change – interest rates are too high. Really? Rates in the 6s sure look better than the rates in the teens that the nation was facing 30 years ago.

Much of what you see both on Wall Street and on the housing market is driven by fear. Fear of the future. Fear of the unknown. Fear that we’re going to make decisions that will prove costly down the line.

The symptoms of this crisis of the American spirit are all around us. For the first time in the history of our country a majority of our people believe that the next five years will be worse than the past five years.

Is it that much different these days?

Writers Block Strikes RE.net En Masse

Over the past couple of weeks, posts have been appearing discussing the writers’ block suffered by the author. Maybe it’s a matter of feeling like everything’s been said about the nuts and bolts of real estate. I know that was the root of mine. Or maybe it’s just a lack of motivation to try and write at a time when it’s so damned hard to be certain of anything.

2008 will mark my best year in this business in terms of gross commissions, and just a smidge lower in total sales volume than I recorded during the market’s rocket ride in 2005. Yet I often find myself … tired. Or, more to the point, worn down.

This isn’t a complaint – I chose this business, after all. But maintaining the necessarily cheery demeanor in the face of 700-point swings in the Dow is a bit difficult. I don’t have the luxury of screaming to mask my fear (and my errors) like Jim Cramer. And it doesn’t get any more personal as an exercise as when you’re doing this in your own car with clients inches away who are seeking validation of their decisions.

(Editor’s note: as I write this, the local high school is having its Homecoming game, which is the only time that fireworks are fired. My family just reacted like we were in London circa WWII as the explosions thundered above the house. Back to our tale.)

If I truly believed the decisions being made were bad ones, I wouldn’t be in real estate. Still, it’s hard not to be influenced by everything else going on in the nation and in the world.

We remember when the phrase “sound as a dollar” was an expression of absolute dependability, until ten years of inflation began to shrink our dollar and our savings. We believed that our nation’s resources were limitless until 1973 when we had to face a growing dependence on foreign oil.

These wounds are still very deep. They have never been healed.

Looking for a way out of this crisis, our people have turned to the Federal Government and found it isolated from the mainstream of our nation’s life. Washington, D.C., has become an island. The gap between our citizens and our government has never been so wide. The people are looking for honest answers, not easy answers; clear leadership, not false claims and evasiveness and politics as usual.

What you see too often in Washington and elsewhere around the country is a system of government that seems incapable of action. You see a Congress twisted and pulled in every direction by hundreds of well-financed and powerful special interests.

You see every extreme position defended to the last vote, almost to the last breath by one unyielding group or another. You often see a balanced and a fair approach that demands sacrifice, a little sacrifice from everyone, abandoned like an orphan without support and without friends.

Often you see paralysis and stagnation and drift. You don’t like it, and neither do I. What can we do?

Searching for the Answer

It’s not difficult to feel somewhat alone even in the real estate blogging world. Most exude such a high level of confidence, you wonder if they feel any of the same doubts, whether they have the same concerns.

Whether they do really is irrelevant, of course, aside from the need for assurance. At the end of the day, we’re responsible for the course of our own career and for the clients we either do or do not help. Even as the stock and currency markets have gyrated, registrations through my Phoenix Real Estate search (thanks, Mariana, for the idea of the blatant plug) have remained steady.

Real estate remains in demand, not as an investment, but as a statement of stability. A place to call home. It’s in these registrations and these inquiries that I see the seeds of the recovery, the slow-smoldering embers of home buried in the ash. And that’s where I turn for the inspiration it seems so many of us need these days.

I do not promise you that this struggle for freedom will be easy. I do not promise a quick way out of our nation’s problems, when the truth is that the only way out is an all-out effort. What I do promise you is that I will lead our fight, and I will enforce fairness in our struggle, and I will ensure honesty. And above all, I will act.

If anyone had told me that I’d write a post centered around any speech from President Carter, I likely would have suggested they seek some psychiatric help. But given the belief that the past is prologue, it was more than a little stunning to discover the same themes with which this nation was concerned 30 years ago still haunt us to some degree today.

Can this second crisis of confidence be overcome? That, my friends, we’ll have to wait and see.

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13 Comments

13 Comments

  1. Steve Simon

    October 18, 2008 at 2:32 pm

    Thirty years does not change a human much, not as a species anyway.
    We are what we were; frail, fearful, when we are at our worst. Resiliant and hopeful when we are at our best.
    When you reach your fifties and hopefully later, being alone isn’t that bad:)
    Feelings canbe changed as quickly as you change your thoughts. If youare happy continue to ponder as you were. If you are fearful or sad, think about something else for a while.
    You sound pretty normal to me Jonathan 🙂

  2. Cindy in Indy Marchant

    October 18, 2008 at 2:56 pm

    Hi Jonathan, this was the perfect article for me to read today. I have been blogging only a short time but over the last few months very regularly and with omph! But over the last few weeks I too find myself with nothing original to say and have made very few comments too. I like to say something worthwhile, even if it is a comment.

    On real estate, what a great testimony to this down market, you are having your best year ever. That says so much about your tenacity, your dedication and your attitude about this market.

    I too am exhausted. Most of the transactions I have had this year have been filled with issues. I had an onslaught of Ameridreams that are always a bit of work, I have had appraisers that are scared to really consider my input, I have had lenders asking for everything but blood and first borns. I have sellers that don’t get this market…that want to hold out for a better price. It has been hard to keep my cool when I am blamed for it not selling when they won’t implement what they hired me to tell them to do.

    On the market, what can I say that hasn’t already been said. Things go in cycles, mistakes were made, correction is costly. But, my focus has never been on the money or the business per se, my focus is on how I live my life and who I honor on a daily basis. So, that keeps me grounded, but the winds blow strong and it has been hard this year to be grounded.

    Your post made me reflect; and I needed that today.

  3. Brad Nix

    October 18, 2008 at 3:00 pm

    I haven’t been able to put my finger on it, thanks for doing so for me Jonathan. I haven’t written much on my blogs lately and I realize now it’s because I am more unsure about my own decisions than ever before. Perhaps it’s because that’s all that surrounds us…fear and indecision – and constant coverage by bloggers and conventional media. I took some time off to be with friends and family and work on relationships that matter most over the last month. Now I am resolved to wade back into the RE.net pool and hopefully be back to making waves soon. Thanks for being real.

  4. Kathy Drewien

    October 18, 2008 at 4:14 pm

    Jonathan, I appreciate your excerpts from Jimmy Carter’s speech Energy and the National Goals – A Crisis in Confidence delivered July 15, 1979.

    I found these comments to be inspirational:

    This is not my best year in real estate. And yet, I am still in business. The franchise I joined in 1994 closed it’s doors less than 3 weeks ago after being in business 26 years.

    Why did they not survive and I am still here? I don’t know.

    What I do know is adversity makes me stronger. My greatest ideas are generated when my back is against the wall. Although it would be nice to have someone say, “Way to go!” when I’m stepping out in faith, it’s rare.

    As I told my girlfriends at lunch today, “I’m free!” If you want to know more about how I gained freedom, give me a shout.

  5. Kathy Drewien

    October 18, 2008 at 4:15 pm

    The blockquote did not appear correctly. My intent was Carter’s comments to appear – not mine!!!

    “We’ve got to stop crying and start sweating, stop talking and start walking, stop cursing and start praying. The strength we need will not come from the White House, but from every house in America.”

    We know the strength of America. We are strong. We can regain our unity. We can regain our confidence. We are the heirs of generations who survived threats much more powerful and awesome than those that challenge us now. Our fathers and mothers were strong men and women who shaped a new society during the Great Depression, who fought world wars and who carved out a new charter of peace for the world.

    We ourselves are the same Americans who just ten years ago put a man on the moon. We are the generation that dedicated our society to the pursuit of human rights and equality. And we are the generation that will win the war on the energy problem and in that process, rebuild the unity and confidence of America.

  6. Elaine Reese

    October 18, 2008 at 5:35 pm

    “Old lady here”! I survived the 60’s Viet Nam era when I had to worry about a husband getting drafted and leaving me with our young daughter. He didn’t because he worked for a high-security company and was able to get a deferment plus he was still in college.

    I survived the early 70’s through the War protests and the National Guard on campus when I was able to attend college (after hubby was done).

    I survived the late 70’s when our fixed rate mortgage was 11%. Our friends were strapped if they had one of the no-cap loans with rates that went to 16-21%. We survived the long gas lines because we had small foreign cars before they were popular – and considered a necessity.

    I survived the 80’s as a single Mom working my way up the corporate ladder while going to college at night for 6 years. I got my degree one week and became a Grandma the next week. I was doing very well – made very good money – built a good portfolio – and was on track for a nice retirement nest egg.

    In the mid-90’s I was part of a large RIF. Life hasn’t been the same since. I was “too old” to be hired so went into real estate since it seemed to offer a means to more closely proximate my former salary, plus it was a career I wouldn’t have to stop when I became 65 – which I did last month.

    I’m been working hard all my life, and this year I’m working even harder. My business is up over last year, and my income is up even more thanks in large part to my WP blog. I try to stay positive, and when it gets tough, just go back to my mantra that has helped me for years … When life gives you lemons, make lemonade. Instead of pity parties, I try to look for the fork in the road that allows me to explore new opportunities when bad things happen. That same philosophy applies to marketing myself as well as my client’s homes.

    So ….. been there, done that, got the T-shirt … and I DON’T want to share my “wealth”. I work too hard for it. Stay positive, Jonathan! This too shall pass.

  7. Paula Henry

    October 18, 2008 at 9:59 pm

    Jonathan –

    You may have hit upon the essence of what is really driving the economy and decisions in todays fragile market. FEAR! In and of itself, fear can not master us, however the fear we see in others makes it much harder to stand in confidence.

    I too am having a good year, but lately have had many more buyers turned down for credit and those who do qualify are afraid to make a decision.

    I have suffered from my own writing blocks, more so, just busy and when business calls, one must be ready. Yes, much has been written about real estate and often there seems not more to expound upon – yet, those of us who find it within us to carry on, will be glad we did.

    Thanks for a much needed post! Cheers!

  8. Missy Caulk

    October 18, 2008 at 10:29 pm

    Jonathan, I so appreciate your articulating what I have been feeling. The whole election thing is just dragging me down and just not in the mood to deal with real estate posts, either write them or read them. Right now posts like this that hit on the emotional level are what I need and can relate to. So friend we are in the same spot, we’ll move on things will get back to normal.

  9. Benn Rosales

    October 18, 2008 at 10:41 pm

    I think you have to go on business as “unusual.” Meaning, cling to the things you can control, accept the things you cannot, and do the things that you’ve always done, but better.

    Sitting around fearing the unknown is enough to kill the soul.

    Get aggressive, challenge yourself, challenge others, be inspiring, and above all else, allow youself to be inspired by the little things.

    just my 2

  10. Jonathan Dalton

    October 19, 2008 at 9:40 am

    Steve – you’re in the minority on the normal opinion, but I’ll take it. 🙂

    Cindy, Brad, Paula, Missy – glad to see I struck a chord. That was the hope.

    Benn – absolutely right. And there have been moments over the past year when I’ve done just that, spending more time wringing my hands than putting them to work. Sometimes it’s easy to snap out of such a mood, sometimes it’s not. But there’s no question that this is the time to be aggressive and also be real.

    Elaine – appreciate it. These usually are the times when I start another website, pursue another avenue toward client acquisition. The odd part is I’ve been too busy to do it of late, which is a good thing.

    My overall hope is we can pull each other out of the malaise many of us slip into at times like this. Isn’t that what friends are for? (Cue the Dionne Warwick music)

  11. Charleston real estate blog

    October 19, 2008 at 5:18 pm

    Jonathan, while I appreciate your efforts to pull friends out of the “malaise”, I have to go with Benn’s idea of taking responsibility but I fear that most voters will prefer to be taken care of instead of taking care of themselves.

  12. Vicki Moore

    October 21, 2008 at 3:33 pm

    I really enjoy your writing. It’s a unique, creative and fun style.

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Economic News

How small businesses can keep up with the changing workforce

(ECONOMIC) Trade schools are booming as career outlook grows. College enrollment is down. The workforce is changing. How can small business keep up?

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Trade employees in the workforce

College enrollment has dropped off by three million in the last decade, with a drop-off of one million due in the last several years as a direct side effect of the Covid-19 pandemic. This phenomenon clearly does not bode well for the future of the United States’ economy and workforce, with students who attend low-income schools and come from low-income families being the most affected. These changes are disproportionately affecting students from low-income schools and families, the very people who need higher education the most, and are erasing much of the work done in the last decade to help close the income and race gap between students, colleges, and socioeconomic backgrounds.

Enrollment in trade schools is skyrocketing.

Recently, trade schools have seen a 40% bump in enrollment across the board. Many students are enticed by the fact that trade schools are affordable and offer a quick turnaround, with students paying $16,000 or less for their program, and their training taking a year or less to complete. Beyond that, those who complete trade school is all but guaranteed a job on graduation day. Their earning potential is often two or even three times higher than the initial cost of attending the program. As many have found, the same cannot always be said about those who pursue a college education.

While the average cost of college at an in-state and public institution hovers at around $28,775 per year (according to Forbes) and takes an average of four years to complete means that trade students have a cheaper educational cost, (between $16,000 to $33,000 for the entire program, or about equal to just one year of a public college tuition) can get work in their field more quickly, and can usually make more than their educational costs in their first year on the job. Tradespeople make an average of $54,000 fresh out of trade school, which rivals the role average college student’s first salary of $55,000. It’s no wonder so many people are choosing to forgo a formal education for trade school!

The almost insurmountable cost of college combined with ever-growing inflation and a lengthy list of requirements just to get a post-college job, all for a low salary and with students having hefty loans to pay back, also play a key role in the downturn in the popularity of college.

The implication of fewer college-educated people, however, means that over time, the United States as a whole could face an economic downturn, as it gives rise to many more blue-collar workers. This can irrevocably alter the makeup of the workforce. Despite current unemployment rates being among the lowest they’ve ever been, the American people are already starting to see a shift in the labor market.

Already, we see a strain in the labor market when 25% of skilled workers in the U.S. exited the workforce following the Covid-19 pandemic. The economy has become so highly specialized that if the U.S. were to keep up the trend of losing college-educated workers, there could irreversible damage to the United States’ economy, deepening the ever-growing divide between the middle class and the working class, further reducing the ability to affect the global economy, knocking the United States out of the classification of a “global superpower.” To make matters worse, much of the United States labor pool is outsourced, and we are seeing the rise of artificial intelligence and robotics taking over many jobs, especially minimum wage jobs. While none of these factors alone vastly affect the U.S. labor market, this is only the tip of the iceberg.

So what can employers do when the makeup of the workforce starts to shift?

Employers could shift the focus on the years of experience rather than the type of education the potential employees have, as well as offering more extensive on-the-job training, which is already commonplace in some industries. Even for those with a college education, the requirements for entry-level jobs seldom match the salary, with many employers requiring a four-year degree, two or more years of experience, and fluency in different programs which vary from company to company. Employers, if possible, need to offer higher salaries with fewer requirements, as many young people are finding the pursuit of college, plus the various other requirements just to be considered for a barely above minimum wage job, while they’re drowning in student debt fruitless, so they forgo college altogether.

A post-pandemic society looks vastly different, and employers must adapt to keep up.

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Economic News

Boomers retirement may be the true reason behind the labor shortage

(ECONOMY) Millennials and Gen Z were quick to be blamed for the labor shortage, citing lazy work ethic- the cause could actually be Boomers retirement.

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Older man pictured in cafe with laptop nearby representing boomers retirement discrimination.

In July, we reported on the Great Resignation. With record numbers of resignations, there’s a huge labor shortage in the United States. Although there were many speculations about the reasons why, from “lazy” millennials to the number of deaths from Covid. Just recently, CNN reported that in November another 3.6 million Americans left the labor force. It’s been suggested that the younger generations don’t want to work but retiring Boomers might be the bigger culprit.

Why Boomers are leaving the labor force

CNN Business reports that 90% of the Americans who left the workplace were over 55 years old. It’s now being suggested that many of the people who have left the labor force since the beginning of the pandemic were older Americans, not Millennials or Gen Z, as we originally thought. Here are the reasons why:

  • Boomers are more concerned about catching COVID-19 than their younger counterparts, so they aren’t returning to work. Boomers are less willing to risk their health.
  • The robust real estate market has benefitted Boomers, who have more equity in their homes. Boomers have more options on the table than just returning to work.
  • Employers aren’t creating or posting jobs that lure people out of retirement or those near retirement age.

As Boomers retire, how does this impact the overall labor economy?

According to CNN Business, there are signs that the labor shortage is abating. Employers are starting to see record number of applicants to most posted jobs. FedEx, for example, just got 111,000 applications in one week, the highest it has ever recorded. The U.S. Bureau of Labor Statistics projects that the pandemic-induced increase in retirement is only temporary. People who retired due to the risk of the pandemic will return to work as new strategies emerge to reduce the risk to their health. With new varients popping up, we will have to keep an eye on how the trend ultimately plays out.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

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