I seem to remember being taught this simple concept in high school science class. The concept has been reverberating in my head now for the last few months. Nature Abhors a Vacuum. If there is a vacuum, nature will try to fill it. If there is an empty space, it will not be empty for long. If there is more of something on one side of a fence, the other side of the fence will be a more attractive place. Nature likes to see balance and fights imbalance.
Gail and I are spending a few weeks in full nature at Otter Cottage, Our place up in Murphy, NC. Otter Cottage sits on the Nottley River which rushes past the cottage non-stop every day. The river brings cool breezes, soothing sounds, Kayakers, and the occasional otter. (It's easy to spot the otters they swim UP stream).
The stream is continually eating away at the river bank and I diligently take fallen rocks from the mountain that hosts Otter Cottage and place them in jetties along my bank in a seemingly futile effort to have some say in the entire process. I began to think about a earlier version of this letter about nature abhorring a vacuum along one of my daily hikes. If there is a sunny spot along my hike in the woods, there are leafy bushes and young trees that want to make it shady and fill the gap. Hills want to fill valleys. Nature likes to see balance and fights imbalance.
This is the case with people. (You are thinking, all right, Gregg, where are you going with this and how does it relate to real estate investing? Stick with me here.) Years ago Gail and I were on vacation in the Czech Republic, birthplace of my grandparents. We stayed in Prague and toured churches, castles, museums, outlying towns, apartment buildings, restaurants, old buildings and talked to many people. The Czech Republic had been way on the "other side of the fence" from the rest of the world since World War II. Only since 1989 has capitalism been permitted and communism defeated. For the last 28 years one side of the fence has been pouring into the other. That trip triggered the first article about nature abhorring a vacuum. Anyone who has traveled knows that you don’t travel to experience the homogeneity, you travel to see the differences. And the differences are disappearing.
My real estate "take" on the principal of Nature Abhors a Vacuum is this: present information and transportation technology will increase cultural homogeneity, lower or remove fences or barriers and have a tendency to make all markets and people more similar to one another than more different from one another. This means to me that what I see as a general long term trend (in real estate, for example) in one area will tend to occur in other areas. What is happening in the US will happen in the Czech Republic. What happened in California will happen in Florida. What happened on the east coast of Florida, will happen in Fort Myers. Even this peaceful slice of paradise along the Nottely River will succumb. All this will happen to varying degrees and in varying time frames, but the real estate world is moving to "fill the vacuum", to sameness, to balance.
The key for us is to identify the trends that will stay and spread and to identify the markets that will be affected next. We can learn from the east coast of Florida. We can learn from California. The center of the State of Florida can learn from our own area here.
As you look for opportunities for real estate investing, look for the "vacuums" and for the trends that will eventually flow into those vacuums.This is where opportunity lies.