For centuries historians have questioned whether the American Revolution was driven more by ideas or by economics. I am totally in the “ideas” camp, but it would be fallacious to believe that an economic crisis does not lead to grandiose ideas.
Currently, real estate prices are climbing at unprecedented rates. More and more companies are focusing on consumer experiences and behavior. We are experiencing record mortgage rates and relaxed credit standards, but as was the case in 1762, something is wrong. What happens if the other shoe falls off? What are the grandiose ideas that will survive the times, prevail and rule the future, let alone the revolution?
In 2008, Tim Arango wrote a item compare the real estate bubbles of that time with the American Revolution. He explains that Benjamin Franklin, back in America after five years in London, was stunned by the threefold increase in house prices. The argument was that some historians believe that the Revolution was sparked by an economic cycle of boom and bust that is not unlike what many are experiencing and / or predicting now.
Understand that people lived wonderfully after the French and Indian wars. Shortly after, credit tightened, money stopped flowing so freely, people lost their homes and land for non-payment, the population of the settlements grew much faster than in Great Britain. Brittany and once affordable housing have swelled. Then the British enacted the Stamp Act, which is widely regarded as the “trigger” of the revolution.
Yet the dominant idea was that “a confluence of unpleasant economic circumstances” gave way to grandiose ideas about what America could and should be: a capitalist society with individual and inalienable rights. It was grandiose by any stretch of the imagination. So what is the parallel now and what can we learn from our nation’s humble beginnings?
1. It is unwise to underestimate the social experience associated with economic situations, whether they are booming or broken down.
2. Good ideas are rarely comfortable, initially misunderstood, and rarely seen as “sensible”.
3. Americans are resilient and determined. Historically, every event that created economic instability or uncertainty has given rise to grandiose ideas, innovations, efficiency gains, growth and progress.
As real estate professionals, there has never been a better time to engage with your connections, spheres of influence, databases, and the people you can create a “fence” around. for the purpose of your future growth. Now is the time to plan for additional income stream opportunities by thinking beyond mortgage, title, guarantee and insurance partnerships.
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Frank Chimento is Executive Vice President of Revenue and Business Development at MooveGuru and has been helping agents and brokerages for over 20 years.