Charlie Munger said that the cycle of “suffering” is normal in real estate, but they will not last forever.
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When navigating twists and turns of 2025 Housing Market– An economy that surprises interest rates, stubbornly high home prices, and feels like you’ve been caught between gear – it’s hard not to think about it slow Charlie Munger.
The legendary investor, who passed away at 99 in November 2023, had front row seats in almost every economic cycle imaginable. And although he is no longer here to give us his sharp, nonsense advice, his words still echo in times like these.
2022 Daily Journal (NASDAQ:DJCO) At the shareholders meeting, Munger summed up the market cycle in his own way.
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“If you’re investing in stocks for long term or for real estate, of course, there will be periods when there’s a lot of pain and other periods of time that’s booming,” he said. “And I think you need to learn to go through them.”
Fast forward to 2025 and those words couldn’t feel more relevant. Now we are in what many people call “lumpy recovery” in the housing market. Zillow predicts that more buyers will re-enter the game this year, but the unpredictable mortgage rate still casts a long shadow. Fannie May isn’t exactly optimistic either. Thanks to the issue of affordability and the infamous “lock-in effect” that keeps homeowners from trading up and down, the market suggests that for many, the market will continue to “frozen”.
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But here’s it: Munger had seen it all before. Boom, bust, recession, recovery – different players, same game. His advice was not to try to betray the cycle. It was to survive.
Quote Rudyard KiplingMunger reminded investors to “treat these two con artists the same way.” Whether it’s a bull market or a housing slump, the lesson is clear. Don’t get too high during a boom.