Not that I am really sure just what that means, except that it is the opposite of misplaced optimism. I bring it up because I was “accused” last week of having “misplaced optimism” with regard to the real estate market. So, with my usual introspective take on the really silly things people say, I started to think about “misplaced optimism”. Just exactly what could that be? When could optimism ever be misplaced? Does “misplaced” mean that I should not express optimism? Or that optimism is in someway lost? Or If I, or the collective we, just do not want to recognize positive anything? And, if “optimism” is indeed lost, just where should I go searching for it?

Just so the average member of the home owning or wannabe home owner public is up to date, there is a large group of “optimistic” investors wandering around buying residential real estate. Lots of it. They are renting them out, covering the debt, and waiting patiently for the market to rebound. Grasping the fact that all markets move up and down is not a discussion of optimism, it is a discussion of and understanding of basic economics. It’s only been two years when the average American was buying real estate at a furious pace, using loan vehicles that transferred all the risk of borrowing to securities investors trying to get a bit more profit than made good sense. There was not even a hint that the market was at the peak. Just as few people recognize the peak of a market, if is also true that few people recognize the valley of that same market. And those securities investors forgot about the market also. If I owned stock in Merrill-Lynch, I would be furious today that a small group of greedy managers (who no doubt walked away with really big bucks) flushed both the company and my stock value.

In Denver, we are no longer in the valley’s creek. The Denver market has started slowly up toward the next peak. The operative word is “slowly”, because this time around it will take awhile for the the capital markets to re-establish themselves and create equalibrium in mortage loan origination’s. But, it will peak again in three years or ten. That is probably way to long for the average American, but long-view investors will get rich from Joe Citizens impatience.

Written by Larry D. McGee, Denver Realtor - Visit Website Sphere: Related Content