Investing in Caves – For Wealth or for Fun?


Investing in caves could show us a new trend in home buying patterns. This was my thinking when a recent message looked at a recent cave purchase. See http://www.garyascott.com/2007/07/17/1746.html

Our son Jake had written; “Dad, a BBC article of July 4th entitled ‘Cave home auctioned for £100,000’ shows how expensive things are getting here. It says: ‘A cave home in Worcestershire complete with a front door, fireplace and pantry, has been sold for £100,000. Rock Cottage in Wolverley, which is hewn out of a sandstone cliff and has three adjoining caves, was last occupied in the late 1940s. It was auctioned by Halls estate agency for four times its £25,000 guide price. The cave, which comes with windows, a sitting room and bedroom but has no electricity or water supply, generated more than 50 requests for viewings. The auctioneer’s comment was Unbelievable interest.”

$200,000 bucks for a cave? What can this possibly mean, if anything?

I asked for your opinions because I respect you, your thinking and the wisdom of the masses.

Thanks for the many replies. As you can see below they suggest that efficient, safe places away from the maddening crowd have a growing value. Combine this thought with inflation and we get expensive caves as in $200,000 for a place without water and electricity.

These underlying desires certainly seem to be affecting the pricing and changing values of many things…caves being one…coffee being another as in $8 dollars a cup.   See how below. After we look at some of the replies about caves that readers have shared.

“Gary, I have a book here ‘Cave Living in France’.  The author is a local attorney who married a French young lady who is an artist. Apparently, there is a region in France where there are many such caves.  In one of the ones he writes about, the owner took him back deep into the mountain.  All the way back were the bottles of a magnificent wine collection.”

Seems to me that this phenomenon goes beyond storing wine. This must be a trend if there is an entire book about it in just one part of the world.

However JD from Belgium may disagree as he mentioned wine as well: “Gary, I am not sure that buying a cave has anything to do with nostalgia. It is a fact that a cave is naturally insulated against noise and extreme temperatures. It normally has a constant temperature and therefore ideal for storage of wines, parking vintage cars etc. Regards, JDW – Belgium.”

Eric from San Francisco questions if this is a trend at all and says: “Hi, Gary: Me thinks 50+ people wanting to view the cave is much too small a number (yet) to derive any trend.  And how many of those 50 were exhibiting nothing more than idle curiosity?  Were not at all serious about bidding?  “Unbelievable interest” seems a bit over the top.  RE and auction folks tend to blow things up a bit anyway. Worth watching to see if anything else develops along these lines, though.  But earthen homes, built into hillsides, have been a staple of the Mother Earth movement for many, many years in the US.  You can buy plans for making them quite easily. Warmest regards, Eric”

Another reader says this is a full blown trend and tells of a story from Spain:  “Gary, I’m afraid this trend is already full blown. I was in a town near Granada, Spain in May and slept in a cave house. People come from all over to do this. It did have plumbing and lights. Why did I love it? Complete silence for starters. In that windowless back bedroom there was almost no light and no outside sounds. I had a most amazing night’s sleep. I had a chance to get away from the world. I think it goes further then that; the energies from the world are blocked out by all that earth around you. The energy that we factually know is there from power lines etc but also the energies that we don’t acknowledge as yet scientifically. This town and the one next to it had hundreds of empty cave houses just a few years ago. We spoke with a retired Englishman about it. He said that the caves sold for around 10,000 Euros then and now many times that. All over town work was being done on the caves. There were cave museums private and official as well. The caves stayed a fairly constant temp. as well even through that part of Spain is very cold in winter and hot in summer. Hugs.”

Another reader shared:  “Gary, As witnessed by the Green Portfolio. The mindset is to get back in touch with nature possibly the Earth. How better than to actually return to the earth. Also maybe our delicate bodies are missing the vibrations the earth delivers and this would put us back in tune so to speak, or quite possibly the atmosphere is full of EMF from satellites, cell phones, power lines and our subconscious is telling us where to go to shield ourselves. Back to her Bosom.”

That makes sense living out here in the bush where cell phones do not work I can relate to getting away from EMFs.  This shows that this trend may be supported by a larger trend of returning to nature, wanting to be involved in restoring the environment and such. I can buy that!

Pat agrees as she shares this thought: “Hi Gary! Hope to catch a seminar soon – have been busy with advanced degree courses…..re Neanderthal investing?  I think the reason people find the cave attractive is their desire to exit noisy cardboard-wall apartments and dwellings.  Can you imagine how QUIET a cave must be?  How impermeable to tornadoes, and other disasters?  It is the ultimate cocoon.  It is the ‘stop the world I want to get off’ dwelling.  There are no property tax collectors, noisy streets, utility bills, etc.  It is ‘off the grid’ in the true sense of the word.  I get these impressions because sometimes I would like to just sneak away from all the demands of society and live my own life free from car inspections, junk mail, noisy hot-rodders, etc.  This would be the cocoon – back to nature.  Nobody would ring my doorbell selling magazines or showing me a Bible if I lived in a cave.  There is also a ‘survivor’ streak in me that the cave elicits.  I am survivor, hear me roar!  And what about all that ambient lite from street lamps across the street that destroy one’s sleep and the beauty of the stars?  Gone at last!! Are those enough theories for you?  Now back to my cave…………………(smile) – Pat

“PS – Might want an airbed or at least a hammock, though!  Maybe some Aleve for arthritis in the dampness? Oh, and some bat-spray w DEET!  Just throw out the make-up and the cell-phone, thank you!”

Now we can start to see how the wisdom of the masses work. Here already we see a clue. Reader #2 wrote, ” Back to her Bosom.”  Pat wrote: ” This would be the cocoon – back to nature.”

Ed from Houston agrees as well as he wrote: “Gary: A cave is a true ‘green’ home with a very small carbon footprint. Ed”

Another reader agreed but from a fear base saying: “Hi Gary…how ’bout apocalyptic fear of future? nuclear winter, primitive return to shelter, etc?”

Alan from Canada also had a similar thought and said: “If I’m not mistaken, the cave was bought by a local who merely wanted it to stay ‘as is’ without being changed. But for your question as to why so many people were interested in it, the following thought occurred to me when I originally read the story: With so much talk these days about the possibility of nuclear war, perhaps more people than usual are starting to think about a ‘safe haven’ should things go bad.  I know when reading about the subject, the best way to survive nuclear radiation is to have as much rock–earth–stuff etc. between you and the source. A ‘house cave’ would work quite nicely! Cheers, Alan.”

Others agree on the fear factor and say: “Hi Gary, This is just a guess…but without water or electricity you would have to live like a spartan.  So perhaps this is some survivor strategy.  It seems a cave would withstand a lot.  That would be a fear based purchase. Or it could have fantastic views and be a nature getaway for someone with money to burn.

Also, the Brits are famous for eccentricity. Either that, or the world has gone mad.”

Many readers might agree with the madness thought. However there were more practical considerations as well.

Energy efficiency was mentioned by this reader: “Dear Mr. Scott, During the first energy crisis back in the late 70s and early 80s ‘earth houses’, basically  structures covered with dirt on three sides and the roof were a minor fad due to their energy efficiency.  Perhaps that’s part of the allure of caves in England.”

Trey, up here in the Blue Ridge also mentioned this and wrote: “Gary, We have an underground house listed and it seems to be generating a lot of interest. Maybe it is due to its energy efficient nature, or its uniqueness or just peoples fondness for Hobbits!! Who knows? Trey”

Bob from Florida thought that just being different was a factor and said: “Gary, The clue I see is that there is a niche market out there of people who would love to have a very unusual, different type of housing, maybe ‘homes molded to the earth’.   For example, after surveying first of course, I’ll bet there is a market out there for something like flying saucer shaped homes built into the side of a hill, maybe even up on top with a view. Bob”

Ryan agreed and said: “Gary, Perhaps people just want something more unique to call home.  Nowadays, most developers only build boring McMansions with no character, and they use the exact same couple of designs all over the US.  I cannot afford to travel much abroad, so I don’t know the situation in other countries, but I would assume that it is the same.  Perhaps this is part of the reason that more people are drawn to historic downtowns and homes in rural areas – while these older homes may not have all the bells & whistles, they have character.  As an investor, I would look for unique properties or invest in developers/funds that specialize in historic and unique properties.  Real estate may be finite in supply, but McMansions seem infinite in supply!  A quality, unique property will always be rare and desirable, and is likely going to be more so as people get fed up with the McMansioning of America. Ryan”

This is a good point and another reader thought all these factors came into play and wrote a fuller note.

“Gary, I believe interest was so high and the final bid was the same because of our yearning for… 1) Simplicity — Our world has become so complicated that I believe there is a sizable percentage of us who are willing to try nearly anything to simplify our lives -and – 2) Unique — Nearly everyone has been taught, from day one, that you are unique.  There is no one else quite like you!  Well, to take that a little farther into our psyche, one would definitely be unique if one lived (or had a vacation home) in a cave! -and – 3) Nature — There is a sizable group of people who are fed up with all the genetically modified foods, synthetic this and specially formulated that and, well, these folks just want to get back to Nature and be Natural!  I myself love camping and being in nature and as natural as is practical to me.”

Here is another reader with the multiple cause theory! “Gary, I can think of a few reasons off the top of my head why some folks would seek out a cave. One is longevity.  The other is perception of safety. The third is recesses of quiet. This cave has been offering shelter for a long time and it is still there.  So many things are gone with the wind these days.  Plus a cave offers safety from the storm. There is so much talk of everyone NOT being safe…from terrorists, to global warming, to diseases etc.  Maybe these threats are too much and folks just want to go to the safest place…maybe a cave that has survived the elements for a long time. Plus a cave is so primordial. Perhaps we are disconnected from our primal roots now.  Maybe the way we are living on this earth has changed faster than the primordial brain parts of us humans can change and we feel a need to reconnect to that part of us.  Plus it is so difficult to find quiet these days.  I can imagine it would be quiet in a cave…no hearing someone else’s booming radio deep in ya bones. Just thoughts. Love your newsletter. Judith”

Avoiding racing rats also was mentioned as we see in this next note. “Gary, What is the attraction of a cave?  First thing that strikes me is that you do not have neighbors four feet away on either side of you.  You do not have someone living above you.  Traffic does not streak past your cave.  In other words, there is privacy.  There is sound insulation and peace and quiet.  There is also no stained carpet, peeling wallpaper and faulty plumbing.  No noisy and nosey neighbors and undoubtedly, not much of a possibility that it will get blown away in a hurricane, or washed away in a flood. People have been crammed together for so long now that a cave sounds practically idyllic for affordable privacy and protection.  How else can you get that much privacy?  Buy an estate?  To get an affordable one you have to get an old one.  That would mean that you would have to make repairs.  I don’t think caves need repairs, do they? A little sweeping out, a little dusting of cobwebs on the walls…  Plus, other than the entrance, caves don’t allow for someone to break down the back door or break in a window either.  Seems pretty safe and maintenance-free.  Compared to the way that the majority of people live nowadays, a quiet, private, easy to sweep out cave could sound very appealing. Best!”

Linda from Utah agrees and shared: Some thoughts on the Cave:  “Gary, people are tired of the, pardon the cliché, rat race. We are bombarded with information and choices far beyond our capacity to mentally ingest.  Simply stated it’s a case of overload.  It’s not only human nature, but the nature of life itself, to seek safety and comfort in times of increased stress.

“As to the cave, it represents a metaphor of rather interesting proportions.  The ultimate safety – – returning to the womb. And you are correct, in my opinion, about this being a harbinger of things to come.  Surely it is just another manifestation of the flight AWAY from metropolitan life, to the ‘burbs, to the country, and, as you are living, out of the country to a land and culture that communicates what so many of us are seeking . . . peace, and a new source of safety and comfort.  All of this would seem to bode well for real estate in locations such as Ecuador.  But let’s hope that we, the fleeing masses, don’t simply transplant our neurotic western-culture way. I’m enjoying your articles, and look forward to meeting you in the not-too-distant future as I join the exodus. Regards, Linda”

Returning to the womb seemed to be one of the most popular ideas and Kathy from Atlanta agreed but also ended these thoughts on a high positive note. She wrote: “Gary, Caves reflect a return to the womb…a yearning for security on a deeply internal level. Also the return to the womb is a sign that new life is preparing to enter the world.”

There you have it. The tribe has spoken. Efficient, safe places away from the maddening crowd might include caves. Combine this growing thought with inflation and we get expensive caves as in $200,000 for a place without water and electricity.

These underlying desires certainly seem to be affecting the pricing and changing values of many things…caves being one.

Watch for them whenever you invest.  Though inflation will hurt, many watch for the goodness in this evolution as well. As Kathy noted, this is a sign of a new life. We’ll want to invest in this.

However in England right now there may be one more factor…price.  $200,000 for anything to live in is cheap!

Jake sent us a recent BBC article entitled “House prices ‘to breach £300,000”  That’s $600,000.  The article says:

“The average cost of a house in England will break through the £300,000 ($600,000) mark in the next five years, research suggests. The National Housing Federation (NHF) warned prices were now almost 11 times the average wage and may rise by 40% as supplies fall further behind demand. In the 10 years since Labour came to power house prices have surged by 156% while wages have risen by just 35%, research for the NHF carried out by Oxford Economics found.”

Merri and I just returned from a week in the UK and can believe this. We will report on the trip and some profound inflation implications this can have on our investing…including the $8 cup of coffee!

Until next message, good global investing and business to you.

Gary

We look at how to spot wealth accumulation trends at our International business and investing courses. Join us in person September 14 – 16, 2007, Fri. – Sun. for International Business and Investing Made EZ Course, in North Carolina, http://www.garyascott.com/nccourse

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