There is the old quip that “to a hammer, everything looks like a nail.” Like many such phrases, a lot of meaning is packed into a few clever words. The point of this notion is to suggest that one’s point of view describes the outcome sought, or the answer is defined by the question itself.
We marketers suffer from a form of this mindset. When presented with a business problem, a marketer nods to themselves and thinks, “Aha, I have the solution. They need to market better/more/differently.” Marketers are not alone in this solipsism. Product developers think of fixes as “product issues” and sales people always suggest that “sales solves all problems.”
While the notion that we all define reality via our own prism is true, there are certainly differences in the degree to which our truths connect with a neutral reality. It would be highly unlikely for, say, a soft-drink contractor at a large software company to believe that the company’s problems or opportunities stem from which brand of beverages they provide. Such examples may appear to be facetious but they suggest that, despite the democratization of self-serving points of view, some viewpoints win the day more easily than others.
Real estate is a bellwether for the economy
When we consider the economy as a whole, we have to apply this hierarchical principle. For a person employed in any sector, that sector is important. But, when scaled up to the perspective of an entire economy or society at large, different sectors carry different weights. In this matter, one sector strides like a colossus over others: real estate.
The numbers involved are awesome. In the U.S. alone, there are in excess of 100 million homesteads, with an aggregate value of $40 trillion. Of the $40 trillion, approximately $22 trillion is equity owned by homeowners while $18 trillion is mortgage debt.
These numbers might appear so large as to be abstract, but with those numbers, so goes the economy. As such, real estate is a bellwether, an upstream area of the economy. Other sectors, like bicycles or paper bags, while certainly important, cannot claim such a high standing.
Now, we know that different cogs in the economic machine are connected — even synchronized at times. Given this, to understand much of the economy, one requires an understanding of the real estate market.
Thus, real estate content matters to you
I write this piece in a strident fashion for a specific reason: I neglected to understand this sector for most of my working (and investing) life. I’ve made many predictions that were flat-out incorrect while soberer souls, who understood the dynamics of real estate, laughed to the bank.
Of course, most of us have witnessed collective failure as well. We’ve witnessed a global meltdown —driven by real estate — that suggests that crowds are often “dumber” than individuals, not the other way around (as the crowd-sourcing folks will argue until the end of time.)
But. learn we must and what better way than to ingest content and subject it to a data-driven interpretative layer?
I am in PropTech nowadays and perhaps my newfound zeal for real estate content is a reprise of the hammer and nail problem. But, I think not. Instead, I think that no one can afford not to understand this dynamic asset class and the role it plays in, well, everything.