Real Estate and Psychology
Last week at the 2013 Spring Conference in Las Vegas, Chris Lee of CEL & Associates gave an interesting presentation on “Trends, Opportunities & Predictions
A Roadmap For Success”. This session covered a variety of topics related to the economy and real estate, including the Psychology of Real Estate.
Lee compared the needs of people in real estate to Maslow’s Hierarchy of Needs. Maslow was an American psychologist in the early-mid 20th century. He theorized that the most basic level of human needs must be met before a person will want the secondary or higher level needs. Here is a depiction of his theory from Wikipedia.
So how does this relate to real estate? Lee shared that in a down economy, people buy real estate in much the same fashion. In a recession, people focus on the basic and necessary real estate, such as apartments, grocery, pharmacy, and health care. Only when the economy starts to recover do people begin to spend more on industrial, government, and education….and the better the economy, and the better the basic needs are met, the more likely they are to spend on higher level needs. Click the image below to enlarge Lee’s slide.
Does this theory fit in with what you have experienced?
Lee also discussed the economic outlook, employment, real estate cycles, and strategies going forward. Lee’s complete audio presentation will be shared with CORFAC members in the coming weeks. You can find his presentation in the Extranet under Las Vegas 2013.