There’s a certain type of person whose most approving judgment about someone else is that he or she is “very bright” or “brilliant.” Those of us who endorsed candidate Barack Obama thought he was on the spectrum somewhere between the one and the other. We thought candidate John McCain occupied some other place on that spectrum, and he reinforced our judgment by bad management of his campaign effort, bad choices along the way, and foolishness when the 2008 financial panic turned the presidential election campaign into a one-issue competition.
So we went with the smart guy, and three years later we’re left wondering if we measured wrong, or used the wrong measuring stick. Maybe an intelligent candidate who features humility, prudence, and clarity, instead of the antonyms to each of these would have done better.
But very smart, even brilliant, people pleasure themselves daily by telling the rest of us what to do and predicting what will happen if we follow instructions, if we hate the ideas and the people the instructors tell us to reject, and embrace the ideas they tell us to embrace.
The blinding truth, detectable by even those of us with common intelligence, is that these peerless ones are often wrong. For instance, a lot of the smartest people in the room lost billions of their own money and a whole bunch of yours Monday in the stock market. They had done the same in the 2007-2009 period also, but they didn’t learn from the experience. And, it’s possible that of the few who survived the previous rout and Monday’s encore, or even made some money on both occasions, were nothing more than lucky. Even the smart ones need some luck now and then, although they certainly wouldn’t admit it.
On the home front, the performance of the Vineyard real estate market teaches the same lessons that political leaders and economic forecasters teach us, albeit unwittingly, if we only look carefully. The lesson is, don’t throw your heart after the smart ones, look at the data, apply some prudence, and make your own call.
A year ago, most skilled — or at least committed, professional — real estate industry practitioners were hallooing cheerfully about the improved performance, in terms of sales and sales prices, comparing 2010 to 2009. They thought low interest rates, the reliably healthy appetites of wealthy off-Islanders for Island vacation and retirement property, and the improving economy meant that real estate recovery was happening. After all, results for 2010 saw the volume of sales jumping compared with the year before, and the dollar value of the sales jumping too. Of course property inventories, ranging between 750 and 850 offered for sale, continued higher than normal by an order of magnitude. But, hope and change were happening.
The median and mean prices for real estate sales in 2010 were $582,000 and $1.056 million respectively, a jump from $560,000 and $1.017 million the year before. (Figures are from LINK listing service data.) This year, as of the end of June, volume and prices are both down, the former by 16 percent, the latter by 18 percent. The median price of a transaction this year through June is $549,000, and the average is $937,000, each lower than the comparable figure for 2010.
The best a professional observer might venture is that the market has not collapsed. It totters on.
How many sales of land, houses, and commercial property had been concluded through June this year? One hundred seventy-nine. That’s 17 percent fewer than the figure for year-to-date June a year ago. If the volume of unit sales were to double in the last half of the year, the total would be about what it was in 1999. The bruising that wealth has taken over the past month and especially Monday, suggests that 1999 benchmark may be tough to match.
What would the smartest people in the room say about all this? Well, they might say that with prices down, the great wide world still hankering after Vineyard property, interest rates low, the market awash in property for sale, and the national economic recovery sputtering along, the industry is poised to make progress, especially if economic conditions on the broader playing field tick up, as they surely will.
What would you — not the smartest but not the dumbest either — say?
You might say, my circumstances are not the same as everyone else’s. You might say, I need a little wait and see. You might counsel — to yourself — prudence, humility, and clarity are what I need. You might say, I’ll keep my powder dry, for now.
And, of course, you’d be brilliant.