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Housing Recovery
“Are We There Yet?”

by George Kessel

It seems like only yesterday we would pack up the car with all sorts of goodies, suitcases and of course kids. Off we went on our family vacation. Three-hours into a 12-hour journey it would begin, “Are we there yet?” My wife and I would look at each other and reply simultaneously, “No, not yet, why don’t you try taking a little nap.” It’s now six hours since we left home, the kids are up from their nap and it begins again, “Are we there yet?”

More Time than Money
How many times over the past three years have you been asked, “Are We There Yet?” How many times have you been asked whether the housing slump has bottomed and is beginning to recover? Too many times—and it’s because the length and severity are a once-in-a-generation phenomenon. Some say that it’s the worst since the great depression, others say it’s the worst of all times. I agree with the latter because it affects me.

Remember the year 2005, when housing starts reached 2,068,300 and the 10-year period that proceeded? What a ride, they truly were the “GO-GO” years. Remember the phrase, “time is money?” We used to use it all the time. I don’t know about you, but I haven’t said that in a long time. One obvious reason is because now I have more time than money, but there may also be a deeper, more pragmatic reason.

Consider this: it is my own belief that the busier we get, the more we rely upon quick-fix, throw-money-at-it, solutions. Problem solving is something that I enjoy; however, it is not something that I can do quickly. I like to mull over several alternatives and try to project each of the implications. My brain doesn’t process information fast, it needs time which often involves sleeping on it for several days. Upon reflection, some of those decisions made during the “time-is-money” period appear to have been more spontaneous than thoughtful. One could postulate that the value of time diminishes in direct proportion to the amount of one’s money.

"Our industry represents one of the most noble and basic needs of mankind—shelter."

This downturn has forced all of us to be more deliberate in our thought process. Mistakes are just not an option. “Time is money” has been replaced with “money is money” or, “cash is king.” So, where are we on the latest cycle? My own belief is that it’s just around the corner.

Debunk the Housing Myth
How many times have you heard that housing is dead, or been told to “forget about housing because it’s going to be years before we see a recovery?” I’ve heard it too many times, coming from too many people and from too many directions.

Let’s set the record straight: Our industry is not a fad, nor should it ever have been used as a Ponzi scheme to bundle and manipulate mortgages. Our industry represents one of the most noble and basic needs of mankind—shelter. It’s right up there with food, water and energy. New household formations have outpaced new construction for a number of years. It is also my belief that soon a solution will soon be found to lessen the overhang of foreclosed homes. If not, those homes will no longer be attractive to the people who can truly afford them. We are beyond doubt closer to cycle end rather than cycle beginning. The next time someone asks you, “Are we there yet?” You reply, “Oh, yeah.”

It is important that we all stay upbeat and hope for better times. Just remember not to hope more than you work. I estimate the recovery time to be within the next year for some geographic regions; a little longer for others. (That’s assuming no governmental help; with help from the government, three to four years.)

Surround yourself with people who have a positive outlook on life. Keep away from the whiners and crybabies; otherwise, they will suck the life right out of you. Here is a quote from my all-time hero who went through a few tough times himself, Sir Winston Churchill, “The pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

George Kessel is president and CEO of Morgan-Wightman Supply Co. and treasurer for the Association of Millwork Distributors.



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