This thoroughly researched yet accessible book really hammers home the singular regularity and robustness of the property or real estate cycle, through some 200 odd years of the US to near the present day. Through the early days when there was a vast expanse of land still to be taken over; across different policies, governments, and financial and regulatory regimes; not to mention other external economic and world events, the sheer weight of evidence compiled over many cycles is impressive. By concentrating in depth solely on the US story the author may have picked the cleanest case to describe.
I've just finished a second reading of the main historical section. Although the writing is lively and the message clear enough first time around, there is a lot of material and it took me a certain amount of thinking time to mull over and take on a wholly new perspective.
Despite the existence of the cycle there is room for much variety in the basic drama. Each time around has its' own flavour, e.g. the location and type of property speculation is most focused upon, the magnitude of the boom and bust, and how credit is organised and delivered. The existence of non-real estate related busts obscures matters further. It's easy for observers, including 'experts', let alone politicians, to misinterpret the reasons for and inevitability of each bust, but the cycle rolls on and the author nails it down.
Descriptions of the scandals and frauds coming out of the woodwork in each bust are included. One point I found unexpected was how self deception (as well as ordinary deception) and groupthink are integral to the cycle.
This book has been instrumental in changing my own thinking, perhaps typical of someone coming from a hard science background, where markets are constantly teetering on the knife edge of efficiency unless perturbed by a sufficient force, to a more flexible behavioural view, though with its own regularities. Highly recommended for the thoughtful, and the just interested.
I agree wholeheartedly with the 3 reviews above. The historical account showing the cycle operating in prior centuries is interesting, the parallels with the 2008 crisis are clear. I have always been interested in property, now having seen 3 booms in my lifetime it was great to read a well reasoned and supported account of what drives the booms. Congratulations to Mr Anderson, a great piece of work.
The Secret Life of Real Estate: How it Moves and WhyThis is a brilliant book for those wishing to know more about the causes of the current and past economic crises affecting the trading nations of the world. The author explains the causes of the cyclical nature of real estate and actions by bankers and others that bring about repeated booms and busts every 18 years or so.