During the boom, I wondered if the results we were seeing might have been fed by a reinterpretation of tax laws — deductibility of leveraged interest, the owner-occupant capital gains exclusion, the IRS Section 1031 tax-deferred exchange, accelerated depreciation of real estate related chattel assets, etc. In other words, were people stupidly reacting to a tulip frenzy, or were they wisely adopting different investment strategies based on changing circumstances — in this case, the spread of information about the tax advantages of owning real estate?
At the same time, no one in real estate in Phoenix takes their eyes off the demand curve, the incredible annual growth in jobs and population in the Valley of the Sun. I’m a real estate bubble skeptic as a default state. I doubted the bubble talk through three years of huge growth, and now through 15 months of a slow loss in values. I freely concede that I might be wrong, but, as always, I think there are very good reasons to bank on the Phoenix residential real estate market.
Whether or not I’m right about Phoenix, the world at large seems to be in for a long-term real estate boom. Here is a fascinating film that I found at Cafe Hayek. And here is much more from the gapminder.org folks.
The software itself is jaw-droppingly cool, but what the subject matter portends for every aspect of human life on earth — including real estate — is beyond enormous.
Technorati Tags: real estate, real estate marketing
