Roy Oppenheim on Real Estate Game Changers: Earthquakes, Tsunamis, Oil Prices
For five years I’ve discussed the inevitability of Black Swan events that change everything overnight – game changers. Certainly, the earthquake in Japan and the subsequent rash of Tsunamis are reminders of that phenomenon as is the ongoing escalated strife and instability in the Middle East.
Not only have oil prices shot up, we now face a whole new set of issues and concerns from the devastation and dislocation in Japan caused by the sudden earthquake. Further, we will have to remain on edge for the next several weeks as aftershocks are felt in the Pacific Rim and the specter of additional quakes loom throughout the world. The Haiti and Chilean quakes were about a month apart last year, and quakes in Australia and New Zealand preceded this massive quake in Japan.
So you may ask, why is this relevant to me, my home and real estate prices? The answer is simple. In Japan, for example, some areas will have so declined in value that the properties may be close to worthless for years, while other areas spared the devastation may over-night double in value.
In the U.S. where certain communities have an excess supply of homes, I have always considered that part of our nation’s resources: an ark so to speak. God forbid, if America was to suffer the kind of devastation we are seeing in Japan, we will have the ability to move thousands of people quickly into homes that are vacant or abandoned. In fact, the latest estimates suggest 11% of all homes in the U.S. are currently vacant.
As a result, we have the ability to relocate displaced families from all over the world and serve as an international ark whereby we not only save displaced families’ lives but also help preserve entire neighborhoods from devastation, not of earthquakes, but of neglect and blight. We must as a nation think outside the box and dig deep into our own history and culture as we try to determine our Nation’s role in an ever changing world — a world that we will clearly have less control over than in prior decades.
From the Trenches