I suppose that we can continue to look at the line of descent that has occurred in employment, housing prices, and retail sales and project that line continuing on at the same steepness which leads to the end of the world. I suppose. Or we can look at the past massive economic calamities that purportedly foretold the end of the world economy except that most of us have long since forgotten about Long Term Capital Management, Enron, Drexel, etc. or even that the Panama Canal project was supposed to end France when it failed. Oh, these were all “end of the world” events. Funny thing is the world didn’t end, it adjusted and prospered. I find it interesting that for years we have been told that there was a housing bubble yet when it bursts everyone is surprised. For years we have been told that the U.S. is over-retailed yet when this shows up as lower same-store sales etc. we are devastated by the bad news. How about this is how it is supposed to work?

So where are the conservative long-term real apartment building investors in all of this? Still chugging along, maybe even better than last year due to fewer people rushing off to buy homes and condos. Maybe the world settles back down to realize that conservative investing is an attractive thing, almost the new thing to do. You wont likely get massive double or triple digit returns but apartment investors don’t expect them either. Slow, steady, not over-leveraged, plain and simple apartment investors of the old-school traditional type today are typically only losing sleep over their other investments performance, not their apartment holdings.

Perhaps we will see 2009 as the year that conservative apartments become the darling of the general market. I hope not as that rarely leads to a good long-term outcome. My clients are in for the long term. In any event, the big bad news fades away eventually and the water calms.

Happy New Year