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You Can Learn a Lot About Real Estate From ‘It’s a Wonderful Life’

Now that holiday-themed movies populate our viewing choices through Christmas, which one addresses a relevant real estate message?

Hands down, It’s a Wonderful Life.

The Frank Capra film made in 1946 is a classic that’s the usual good-vs.-evil moral message. The good, unselfish, and beleaguered George Bailey takes on the evil, rich, miserly Mr. Potter with the goal of making life wonderful for the townspeople of Bedford Falls.

George’s journey takes him to a bad spot that leads to a suicide attempt, which is thwarted by his guardian angel, Clarence.

No reason for a spoiler alert here. We’ve seen the movie several times and it’s public domain enough that we know how it turns out.

Bailey captains the Bailey Brothers Building & Loan, founded by George’s father Peter, who passes away before George can fulfill his dreams of adventure.

Lesson No. 1: Do Your Diligence in Identifying House Trends.

The Baileys’ B&L is the alternative for townspeople who need affordable housing as opposed to the higher-priced slums provided by Old Man Potter, who controls the Bedford Falls bank.

B&Ls were the precursor to savings and loan institutions. According to Forbes, about half of all the outstanding residential mortgages held by financial institutions in 1930 were from the estimated 12,000 B&Ls in the U.S. 🏦 Here’s how they work.

But they must have been susceptible to financial anomalies, such as a “run on the bank.” One run strikes Bedford Falls and George and his wife Mary must use their honeymoon money to keep the B&L solvent.

George reminds his anxious customers to hang tight, that Potter is profiting from the run.

“If Potter gets ahold of this Building and Loan, there’ll never be another decent house built in this town,” he tells them. “He’s already got charge of the bank. He’s got the bus line. He’s got the department stores. And now he’s after us. Why? Well, it’s very simple. Because we’re cutting in on his business, that’s why. And because he wants to keep you living in his slums and paying the kind of rent he decides.”

Another lesson: Be careful of institutional investors who can clamp down on your misfortune at any time.

Lesson No. 2: There’s No Shame in House flipping

With their startup cash gone, George and Mary turn a dilapidated old house into their dream home. It’s drafty and has other issues, but the fixer-upper has four walls for a family in need and represents the value of homeownership.

Lesson No. 3: A Solvent Market Can Benefit Most Everyone

George saves the B&L and proceeds to build Bailey Park, a development with homes that are worth twice what they cost the B&L to build. Potter is warned, and he tries to entice George to come to the dark side. George figures it out in time and keeps the B&L going.

Lesson No. 4: Watch the Market and Keep an Eye on Uncle Billy

Uncle Billy loses a key cash deposit, which means a scandal for the B&L. But thanks to Clarence, a distraught George is saved from suicide, as he gets a vision of what the world would be like if his unselfish deeds had not saved the townspeople. Old Man Potter has taken over the town and it’s now called Pottersville. It looks fun, but it’s created a bawdy version of Bailey Park, which couldn’t help home values. And because George didn’t exist, there’s no such thing as Bailey Park. George freaks. He repents and his old life is restored and George gets his life back as everybody sings Auld Lang Syne and Zuzu hears a bell.

If this had been the real world in the 1930s, all the good feels might have been short-lived. According to Forbes, B&Ls were not sustainable. Certainly, Old Man Potter also would keep applying pressure. Once a meanie, always a meanie.

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