Things are changing. Ha! That and other gross understatements are provided at no charge (so far). “Go west, young man.” was advice delivered to people (men) struggling to escape terrible conditions on the east coast of the US. Gold rushes helped. The advice wasn’t new. For most of human civilization there was always somewhere else to go, assuming you could escape kings, warlords, and slave owners. We may finally be reaching a limit to that advice, and its effects may only now becoming apparent. What happens when there’s no west to move to?

This came up during a phone call the other night. (The easiest way to maintain a safe distance.) And, yes, I know people who’d rather play with ideas than replay what happened in some spectator sport.

Our species started in Africa. (So, yes, everyone has an African ancestry, sort of.) For some reason, someone moved east through the Middle East, some moved north into Europe. Feeling crowded? East to the rest of Asia, and eventually south to Australia and Oceania. Wait a while and all of that feels crowded. Oh, goodie; the ice began to melt and someone decided to walk or sail to this other hemisphere. Wait several thousand years and some of those Europeans decide to leave Europe. Now the east coast of this new nation gets crowded and, well, go west young man, woman, whoever. Fast forward to about a hundred years ago. The Gold Rush is over. The Dust Bowl chased more people west. Now, there are almost eight billion people on the planet. Where do we go next? Movement stalls. It’s hard to be a pioneer when the last frontiers are in space or the depths of the ocean. 

As recently as a few decades ago, the rule of thumb was that people moved about every six or seven years. Better prospects, bigger family, want a different climate? Save your money and move to a place you think is better. And don’t be surprised if someone is making the exact opposite move. Trading houses happens.

Then the Internet Bubble burst. There was a Great Recession (the second Great Depression?). And now, a pandemic. Moving isn’t as easy as it was before. As wealth and income inequality increased, it became harder to move from a poor place to a rich place. Sure, there are better jobs in the cities, but if you’re living in a place with low wages and low housing prices it becomes difficult to accumulate enough to move, whether that’s moving to the west, east, north, or south. Up and down are available, but start with billion dollar checkbooks.

From a typical six to seven year span between moves, it lengthened to about ten, and now to about thirteen. Thirteen years between moves means fewer houses on the market. Fewer houses on the market means less supply even if demand remains high. Less supply, high demand, higher prices. Higher prices are fine as long as incomes rise more quickly. Oops. Income hasn’t budged much in the last twenty (forty?) years. There goes affordability.

I’ve watched such trends for decades. Watching the way our society and ‘civilization’ change fascinates me. A few years ago I became a real estate broker on Whidbey Island (Dalton Realty, Inc.) and had a better reason to dive deeper into such data. One trend in particular is making me ponder. 

At least on Whidbey Island, the current rate of decreasing inventory can’t be sustained. Extrapolate that curve (and extrapolation is bad and will be shown to be incorrect) and hit less than zero homes for sale within two years – which won’t happen. It is hard to have negative inventory. 

Here’s the other inspiration for this post, my regular presentation about real estate and affordability on Whidbey Island. (Whidbey Real Estate During Covid19 – January 2021, available on another of my blogs and on YouTube)

So, inventory will probably run into some other limit because there is always someone who has to sell or wants to sell or can no longer use the house. 

Within systems, when a trend runs into a limit things can either break, move off in a different direction, or surprise us, or some combination of all of that.

According to various economic reports, this isn’t only happening on Whidbey. The trend from six to ten to thirteen years between a house changing ownership is national. 

And then the pandemic hit. Now, some people have an even greater interest in moving; while at the same time, many people are reluctant to move. Demand rises. Supply falls. Ah, oops?

I wonder how much discontent is based on feeling trapped in a bad situation. I wonder how much dissension is heightened because the great mixing pot that was the US isn’t getting stirred as much. And, I don’t see anything that is readily going to change that. 

What happens when there is no equivalent of the west to go to? While I watch trends, the other main trend I am seeing is a retreat from the recent growth in urbanization. Social distancing is difficult when you have to share an elevator, a laundromat, or even just a hallway. Rural life is inherently distanced. Even suburban life has more room than a condo in an excellent downtown. Sometimes a garden in the backyard is more appealing than having a theater within walking distance. (And I know of a few places where it’s possible to have both.)

Much of personal finance is based on anecdotes, rules of thumb, conventional wisdom, traditions and habits. The world has changed, then the pandemic changed it again, and something else may make yet more changes. With that many changes it makes sense to check assumptions about personal finance plans. I have a 40 year mortgage with about 35 years to go. Life in 2055? My plan is highly unlikely to survive that long, partly because it is highly unlikely I’ll survive that long. 

I don’t know what’s going to happen. My apologies if you thought I was going to provide perfect predictions of the future. The only constant is change. I’m in the process of challenging my assumptions about my plan. Will I be here in 35 years? Will the US? Will money? Will climate change change my choices? Will new frontiers like Mars, the Moon, orbital platforms, or living in the ocean become options?

I’ll try to share as I change my plans. In the meantime, especially during turmoil, I plan to continue to spend less than I make and invest the rest. Now, about the amount that I make, can I interest you in buying a house on Whidbey Island, or even more startling, selling one here? Stay tuned. It will be a long time before the world gets back to dull.