Real Estate Investment and Optimism
There are many blogs written by real estate agents offering a lot of great advice. However, how many of them use art history to explain the social and economic dynamics of real estate investors in the contemporary USA? Probably not so many, and maybe for good reason.
Consider these two paintings. Undoubtedly, you'll recognize the first as Vincent van Gogh's Starry Night of 1889. The second may be considerably less familiar. It is also entitled Starry Night, but the painter is Edvard Munch (famous for his painting The Scream).
Both The Scream and Starry Night were completed in 1893. Munch was an admirer of van Gogh, and the subject seems to be directly derivative. Both of these artists lived during the fin de siècle in Europe. This time extended from the late 1880s until the outbreak of World War I or the "Great War" as it was known then. Growing pessimism, anxiety, and a general disdain for economic, religious, and social institutions characterized this period. Essentially, rapid urbanization and industrialization were suspected of seriously damaging the ability of people to live good, healthy lives. With new gains in technology and commerce came a deep suspicion of these same advancements. I am not the only person to think we're living in a neatly analogous time. Though, we're dealing with the rapid expansion of new technologies and the rise of new global markets in labor and materials. I believe that (to a large extent) pessimism and ennui characterize our time in a similar way to the pre-WWI era in Europe. However, there have always been and always will be exceptions to the general feeling of any particular generation, and real estate investors are absolutely among them!
I believe these paintings are illustrative (ha) of the essential difference between an optimist and a pessimist. I won't attempt to carefully define exactly what I mean by these terms, because I rather prefer the ability to change my mind and work with ambiguities. But, let's take 'pessimist' to mean a person who sees the negatives and losses as primary, and an 'optimist' to be one who sees potential benefits and gains as primary. I believe van Gogh's painting reflects a kind of romantic optimism, while Munch's is a comparatively drab statement of the subject. No doubt there is more realism in Munch's work, and I think many pessimistic people have very good reasons for their bleak outlooks. Nevertheless, there is something so attractive about van Gogh's work that it still resonates with people even today. Let's look at another picture:
If you were driving around in your neighborhood, and you saw the home on the left, would you think "wow, what a great opportunity for me to rehabilitate and re-sell this beautiful home?" Be honest. If you're similar to me, you might be more likely to wonder why someone hasn't burned it to the ground by now.
However, real estate investors see the depressing, dilapidated housing so prevalent in many of our urban centers and imagine the potential for new life in neglected structures. Spurred on by their imaginations and a desire for profit, they are transforming our urban blight into attractive and functional housing. It isn't as though they naively ignore the decay and misery of many of these homes, but rather that they have a more robust notion of the potential of these buildings. Instead of muttering and shaking their heads at these sad sights, they begin to calculate repairs costs and resale values. They look into the dreary, dark night and their optimism fills in a sky full of brightly shimmering stars.
Basically, I enjoy working with real estate investors because of their infectious optimism. I describe the gory details of some foreclosed or abandoned home to them, and they get excited! "Oh, the floor is gone? Nice, we can just throw a new one down without doing any demo" is a statement one of my clients actually uttered when I mentioned the lack of floor, thinking the sale was a goner.
If you're searching for a home, consider looking past the ugly realism that you'll find out there in many areas. Instead, maybe consider looking at things with a little bit more imagination and optimism. Who knows, with a lot of work, money, and time: you could transform a grimy dump into your "dream home."