Similarities Of 1954 vs. 2012, More Than Just A Giants’ World Series Sweep

It’s not hard to describe the feeling of waking up this morning to the reality that my Giants had just won the World Series by sweeping the Detroit Tigers; I’m elated.  Their enthusiasm, business-like approach and utter disregard of the self in favor of the team was a pleasure to watch and a lesson for us all.  Because the Giants last swept a foe in the World Series back in 1954, I thought it might be interesting to research the real estate market conditions of that year, and compare it to 2012.  Imagine my surprise when I found the similarities extend beyond a Giants sweep.

1954 saw the beginning of a construction boom that would create the image of “Any Town Prosperity” that we’ve come to associate with the 1950’s.  In 1953, the country was experiencing a recession.  Incomes were down and the nation was mired in an unpopular war overseas, the Korean conflict… sound a little familiar?  However in fall of 1954 a funny thing happened, the government instituted a strategy of monetary easing.  Interest rates came down and government requirements for down payments on FHA and FNMA loans were eased.  At the same time, soldiers began returning from the Korean Peninsula, starting families and builders began a construction boom that lasted more than half a decade.

Demographers find it curious that it was neither an increase in familial size, nor an increase in personal income that fueled the explosion in housing.  Rather they conclude, a “Basic demand” shift coupled with easing lending standards was responsible.  Similarly, consider our situation today.  Construction and home builder optimism is at the highest level in more than half a decade, in response to 6 years of anemic home building.  We are seeing a shift of desired location, back to the cities rather than further into the suburbs, kind of an “anti-‘1950’s” shift.  We alternatively have a home buying population that is both aging and young.  The aging Baby Boomers want one story homes of which a dearth has been built over the past 30 years, while the grand children of the Baby Boomers are finally moving out of their parent’s homes in ever increasing numbers.  Like 1954, we are mired in an unpopular war overseas, coming out of a recession and witnessing unprecedented monetary easing.  The one significant difference I can see is the difficulty of obtaining a mortgage today.  In a continued response to the easy lending of the last market boom, the government still maintains a near choke hold on bank reserve requirements, which in turn is constricting home lending.  This, given the ever strengthening housing market, is the missing key that could propel us  into a full blown economic expansion in 2013.

So perhaps it’s just Baseball euphoria.  Maybe it’s the longing of a bygone era that baseball brings to mind.  Regardless, 2012 may yet draw comparisons to 1954 in more ways than a Giants’ sweep in the World Series, and that would be something to celebrate indeed.

About Tim Freund

Tim Freund has been a licensed real estate agent/broker since 1990. He spent 14 years as a new home sales rep, ran his own boutique resale brokerage for 5 years and is currently an Estates Director for Dilbeck Estates/Christie's International Estates in Westlake Village, Ca. Tim is a Certified Residential Specialist (CRS), an Accredited Buyer's Representative (ABR), a Corporate Mobilty Specialist (CMS) and a Senior Real Estate Specialist (SRES). Tim has successfully negotiated a loan modification for a client and is a professional short sale negotiator. Tim has been married 28 years, has 2 children, is a native Californian and has been a resident of the Conejo Valley since 1991.
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One Response to Similarities Of 1954 vs. 2012, More Than Just A Giants’ World Series Sweep

  1. news article says:

    Very interesting topic , thankyou for putting up. “The great leaders have always stage-managed their effects.” by Charles De Gaulle.

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