Posted by Ben in Ohio on April 21, 2000 at 07:29:19:
States of Fla, Nevada, Calif, Arizona, Texas, Oregon, Washington. Mostly SouthWest and Florida in the South. His lates book is a great read. See you on the beach!
Harry S Dent and The Great Boom Ahead - Posted by JohnG
Posted by JohnG on April 20, 2000 at 15:12:40:
I note that there is some reference to Harry S Dent below and his new book - “The Roaring 2000’s”.
This guy is really remarkable. I listened to him speak 4 or 5 years ago at a real estate conference. He is a Harvard MBA and in spite of that he still makes sense.
He says that most economists will sit in a room on the 55th floor of a building with no lightand no real concept of the real world and try and predict where the economy is going to go; trouble is they can’t relate to real life.
Harry S Dent says - look at the past consumption patterns and then correlate that graph with the population graph and both will follow a similar pattern, with a certain time lag for the fact that our needs and our productivity changes as we go through life.
For example, in our 20s and 30s we are at a low productivity - we are in school and as we enter the workforce we are negative producers until we get experience and learn our craft. Through our 30s we start families, move up into our 2nd home from our 1st apartment or smaller home. By the time we reach the magic age of 43 (this is hisorical data - not conjecture here) - at age 43 we buy our largest home and we are at a maximum capacity for spending. Our kids are at an age where we spend lots on them; we have a huge disposable income that goes on toys and bigger newer gadgets etc.
Then, its all downhill from there ! At that point we start to begin to downsize; the kids move out, we have already bought every new gizmo that we have room for and we sell the big house, get rid of a bunch of stuff we never needed anyway, and our spending patterns decrease.
Now, here is the important point as it relates to us in real estate - there are 80,000,000 baby boomers in the US and 8,000,000 in Canada who are now reaching this magic age of 43. As Ray Alcorn mentioned below, this movement of the boomers into that high consuming age bracket will continue till 2009 and from now till then we should expect a great boom in all areas of the economy. After that, according to Dent, we are headed into a Great Depression - the likes of which we have never seen.
I must admit - when I heard him talk of a 35000 DOW back 4-5 years ago, I thought theres no way. After what we have seen with the Dow and the Nasdaq and as well the fact that this week the market started an upward climb again after last Fridays “largest one day loss in history” - that Harry S may well be right on the Dow as well.
So, enjoy the next 8 years - make all the money you can and make sure you sell off all your properties by the end of 2008 and I will see you on a south sea island which will have all the amenities one could want along with internet access !!!
Re: Great Depression?? - Posted by ken in sc
Posted by ken in sc on April 21, 2000 at 08:35:22:
Where are y’all getting the Great Depression from? Dent says that there will be a downturn for 8-10 yrs, but not a depression. Everything I read says that another true Depression would be difficult to occur due to the way the stock market is set up now. If we have a downturn for 8-10 yrs it would be good to be somewhat liquid in order to TAKE ADVANTAGE of it and buy at the bottom. You know, even during The Great Depression, only 15% of the population as a whole did not have jobs. That leaves 85% that do! So if you are strong enough to maybe lower rents, or sell a few of your weaker properties to get some cash, the downturn time could make you rich when things get back on track 10 yrs later. Don’t think so negative! There is opportunity everywhere!
Re: or… - Posted by eric
Posted by eric on April 20, 2000 at 22:09:30:
what about this? Suppose Dent is right. The next Great Depression hits. I love Dent’s work - but he only talks about macroeconomic spending - which is fine, that’s his thing. But, at the back of The Millionare Next Door, they talk about some businesses that might be very good to be in as the Boomers retire. Estate planning; vacation/recreational real estate; etc. Just because they will be retiring doesn’t mean they will stop spending money; they just will be spending it on different things. How does this help those of us in real estate? Here is my personal belief - around the time Dent mentions, say, 2009, it might be a VERY good idea to either start buying, or converting existing properties, into Adult Living Facilities. Now, this does add in the complexities of running a business on top of the real estate, but oh, what a lucrative business it is. In a nutshell, today’s going rates in most markets are something like $1800 semi private, $2500 private, per resident, PER MONTH. Basically, once you install hand rails in the bathroom, in house sprinkler (fire prevention) and other things to meet the zoning requirements, you then put in a resident manager in one of the rooms, and pay them $500/mo plus room & board, and in return they cook three squares a day for the residents, plan activities, and make sure Mable remembers to take her pills. Your customer base are people who are too old to be on their own, but too young to be in a full blown nursing home. I am thinking that this customer base will be expanding exponentially as the boomers age, and we all know, especially after having sunk their 401k’s and IRA’s into a 35,000 Dent Dow, that they’ll have the money to afford this.
That’s short sighted… - Posted by Mark (SDCA)
Posted by Mark (SDCA) on April 20, 2000 at 17:19:51:
Let’s just take his theory and assume its right all the way… You only mention the great depression… I agree that you would want to be 100% liquid at that point. But the baby boomers kids are coming… And the first wave of them are only about 10 years behind the beginning of this “great depression”. So I would be 100% out in 2008 but I would be back into RE with both feet aroundd 2018 or 2020…
Cheers,
Mark
Re: Harry S Dent and The Great Boom Ahead - Posted by CurtNY
Posted by CurtNY on April 20, 2000 at 16:12:45:
I also saw Harry about four or five years ago in Fort Laud. He’s an excellent speaker and an even better economist. I read his first book and was amazed on how many of his predictions came true (almost all). His first book came out I believe in 1994, I read it in 1996 and it was incredible. I then got his second book. I don’t think his second book is as accurate (too many leaps without anything backing them, unlike the first book) but I would recommend both of them. Just my 2cents.
CurtNY
Re: or… - Posted by Ben in Ohio
Posted by Ben in Ohio on April 21, 2000 at 07:34:06:
You make it sound so nice and easy. The only way you will be successful in that arena is to make a commitment to your customers and provide the best possible care. One of the biggest challenges is hiring good help to be on the premises. Do your due diligence, as I have. I went in to it very excitedly and when I visited a few sites and talked to the owners I saw it in a differnet light. Good Luck to you!
Re: Harry S Dent and The Great Boom Ahead - Posted by Lisa in Oz
Posted by Lisa in Oz on April 20, 2000 at 18:40:41:
Curt,
What were the cities he recommended to watch growth-wise in the next 10-20 years?
Lisa
Re: Harry S Dent and The Great Boom Ahead - Posted by CurtNY
Posted by CurtNY on April 21, 2000 at 09:59:38:
Lisa,
In his last book he doesn’t so much recommend certain states but areas. He feels that city folk will want to move to rural/suburban areas. With the growth in the tech sectors many people are working from home and going to the office (in the city) 1 or 2 days a week, if that. He believes these people are going to want the peace & privacy of these area’s and because of the technology (laptops, the internet, networks, etc…)will be able to. I agree!!! I live in Pleasant Valley NY about 1-2 hours from NYC and I’m seeing it happen already. About half of the offers I make are on older farm houses close to major highways. A $100,000 to $150,000 older farm house renovated can sell upwards of $200,000. I plan to focus on this market!!! (of course I don’t plan to ignore other areas) Good Luck!!!
CurtNY