There are lots of horror stories about real estate in the news at the moment. What is your take on this?
I probably sound like a real estate broker, which I am through and through, but I think real estate can never be judged short-term. This is one of the worst real estate bouts we’ve had or real estate flus or bubble bursting or whatever. Of course, the real culprit is over-leverage on the part of people who couldn’t afford it and the real villain here is probably, more than anyone else, the mortgage brokers and the banks who sold a bill of goods to people who really didn’t understand the details. They were all told the big lie – the biggest lie in the industry – which is “You can always refinance.” But needless to say, when prices dumped down by 35%, people couldn’t refinance. They couldn’t get out, they couldn’t sell. It proved a house of cards. That was at the root of it.
So, is this a terrible time? Yes, for the one in three households in America who have houses worth less than their mortgage. Is that a fun bill to pay every month? Not really. But you can’t judge home values over the short-term. I really believe in hindsight we’ll look at these days where we have cheap money and cheap prices as the ‘good old days’ when we should have and could have. But I don’t think anybody’s going to see that until they look back at it. Like anything bad, you don’t see what’s good about it until you look back. Both in life and in building a business, whatever, it applies to everything. It also applies to the real estate market. You can’t look at where we are now and see it for what it is. I believe we’ll all look back and see it as a super sale of the century a few years out from now, but I guess we’ll wait and see.
So really, your message to anyone who has bought property in the past couple of years and they’re wondering if they’ve done the right thing, is just hang on in there?
Not even ‘hang on’, but how about enjoy your home because it’s not an investment first, it’s a home. We’ve all got to live somewhere. Would you rather be paying the landlord? Some people maybe, not many people. Most people like to own where they live. Two out of three families in America do. So, why not enjoy where you’re living? People are worried about the value of their house daily, people who have no intention of even selling for five years! I think the better thing to do is to think about how you could better enjoy it.
One of the quotes that’s about you: “while others talk about stepping outside the box, Barbara has seldom stepped inside that box.” That comes across very strongly to me. Would you say that’s a fair assessment?
I don’t know what that quote is. What is it?
It’s from the President of the World Association of Domain Name Developers, Rick Schwartz. He says: “While others talk about stepping outside the box, which a lot of business people do, Barbara has seldom stepped inside that box.”
Oh, seldom stepped inside the box. Yes, because it’s boring. You can always do what everybody else is doing and you could even do it much better, but where’s the sizzle in that? It’s pretty boring. You kind of know before you go into it, it’s about as good as it could get. It’s a waste of time. I just think you always find the good stuff outside, that’s all. You could always hire somebody to tend to inside the box. It’s the truth. There are many capable people, but far fewer people who are good on the outside. So that’s another practical reason, forgive my practicality, but that’s another reason why you’re better off. It’s a lot more fun on the outside.
More information at: http://www.barbaracorcoran.com/
