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As we navigate the twists and turns of the 2025 housing market—hovering rates of interest, stubbornly excessive dwelling costs, and an economic system that feels prefer it’s caught between gears—it is onerous not to consider the late Charlie Munger.
The legendary investor, who handed away at 99 in November 2023, had a front-row seat to almost each financial cycle you may think about. And whereas he is not right here to present us his sharp, no-nonsense recommendation, his phrases nonetheless echo, particularly in instances like these.
On the 2022 Day by day Journal (NASDAQ:DJCO) shareholders assembly, Munger summed up market cycles in the best way solely he might: blunt, clear, and unapologetically clever.
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“If you are going to put money into shares for the long run or actual property, in fact there are going to be intervals when there’s numerous agony and different intervals when there is a growth,” he stated. “And I believe you simply should study to reside via them.”
Quick-forward to 2025, and people phrases could not really feel extra related. Proper now, we’re within the thick of what many are calling a “bumpy restoration” within the housing market. Zillow predicts extra consumers will re-enter the sport this yr, however unpredictable mortgage charges are nonetheless casting lengthy shadows. Fannie Mae is not precisely optimistic both, suggesting the market will stay “frozen” for a lot of, due to affordability points and the infamous “lock-in impact” that is holding owners from buying and selling up or down.
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However this is the factor: Munger had seen all of it earlier than. Booms, busts, recessions, recoveries—totally different gamers, similar recreation. His recommendation wasn’t about making an attempt to outsmart the cycle; it was about surviving it.
Quoting Rudyard Kipling, Munger reminded buyers, “Deal with these two imposters simply the identical.” Whether or not it is a bull market or a housing droop, the lesson is obvious: do not get too excessive through the booms, and do not disintegrate through the busts.