In the last housing mania, people drank multiple rounds of the Kool-Aid and lost all perspective. That is to be expected when we live in the land of Hollywood and living in a world of make believe is pretty much par for the course. In fact, faking it until you make it is now a legitimate way to make a living. Doctored up photos with so many filters you would think you are purifying water to drink out of the L.A. River. SoCal is the land of rental Armageddon and delusional Taco Tuesday baby boomers who run around with their ugly looking dogs in “baby†strollers and think their crap shacks are worth one million dollars. So in the last mania, areas that were legitimately tough somehow carried ridiculous price tags. The pitch was that an area was going to gentrify because “no more land is being made!†or that it was in the county. We are now seeing some outrageous prices in areas that still have legitimate struggles. Today we go back to Compton.
City centers from Los Angeles to Miami to Seattle have all seen a massive revitalization thanks to hipster loving Millennials that enjoy good restaurants and access to nightlife versus the white picket fence McMansion propaganda brought on by the baby boomer generation. Zero lot condos and homes make up the new housing demographic where builders try to max out every square inch of their buildable land so they can pack new buyers in like sardines and you can hear your neighbor’s sleep apnea roaring at 3am. This is the modern day dream. Being able to waste your entire paycheck at Whole Foods and eating organic falafel at your new trendy restaurant. But Millennials are choosing to go their own way. For one reason, many can’t afford to buy an overpriced particle board crap shack so they ended up staying at home living with their parents deep into their late 20s and 30s. Many are also addicted to housing lust shows where reality star wannabes flip or flop on big real estate purchases. A modern day Lifestyles of the Rich and Famous. Yet most are not famous and many are certainly not rich. Ideals have simply changed and the market has transformed for Millennials.
Fake it until you make it. No truer words have ever been uttered especially when it comes to Hollywood and the make believe of reality TV. Just because you put the word “reality†in front of TV doesn’t make it so. Yet people flock to housing shows in mass because it feeds into their world view that real estate is always a winning bet. Whether the show is about a couple looking to buy their first home or a show where prospective investors take a chance at rehabbing a former meth home and turning it into a puppy daycare, these shows put out some unrealistic scenarios especially for those that actually buy and invest in the real estate market. Yet that is the rub. Most people never purchase investment property. Most that do own real estate own it as their place of residence. And that is why these shows do so well because they highlight an alternate reality that only works out in scripted reality.
Why must you call it a crap shack? In the last year people have gotten extremely sensitive when it comes to calling certain homes crap shacks. Maybe Taco Tuesday baby boomers should drink a few more shots of tequila before jumping on the internet and being angry that they live in a $1 million crap shack. In reality, they live on expensive dirt with a poorly designed and built property. In the heat of a mania like the darkness of a posh L.A. club as 2AM nears, things might look better than they really are in full sunlit reality. But this real estate pig has more makeup than a clown and it is starting to show. The market has hyperventilated with over exuberance and some people are now cashing in their chips. 2017 is going to be an interesting year for crap shacks across America.
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