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Millionaire Now! by Larry NusbaumThis blog is based on the organizational principles found in my new book, "Millionaire Now! - A Financial Toolbox with Seven Steps to Wealth". |
You Can't Believe Everything You Read
Posted on 05/03/2007 14:57:59 | Link | Post Comment
The sales of St. Joseph statues across America appear to have tripled. Faithful sellers are relying on the “Patron of the Family and Home” to help stimulate real estate closings.
The press has also given considerable coverage to the reluctance of consumers to spend money during what is perceived to be challenging economic times.
You can’t believe everything you read. The experts are often wrong.
Time Magazine reported, “The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.” They wrote that in 1947.
Business Week said, “The goal of owning a home seems to be getting beyond the reach of more and more Americans.” When they wrote that in 1969, the average price of a house was $28,000.
The Miami Herald wrote, “If you are looking to buy, be careful. Rising home values are not a sure thing anymore.” That sage advice came in 1985.
Money Magazine said, “Most economists agree . . .a home will become little more than a roof and a tax deduction, certainly not the lucrative investment it was .” That was their best advice in 1986.
"...for now, the frothy buying conditions in some of the nation's biggest housing markets, especially for high-end-homes, worry economists, who remember how the housing market crashed in the late 1980s after some markets overheated." The Wall Street Journal (bottom of page), March 6, 2000
As Paul Harvey would say, here’s the “rest of the story”.
Real estate is and will be one of the safest and best investments most people have.
The doom and gloom folks are doing their best, but time will prove, as it has time and time again, that they are wrong.
They are entitled to their opinions, but there are other facts you should know. Many industry experts see the 2007 real estate market as a mirror of the 2003 market. By some standards, that’s disappointing. But, the truth is that 2003 was the second best real estate market metropolitan Phoenix has ever seen.
2004 and 2005 was frenzied and unrealistic, so anything “normal” seems slow by comparison.
Even with some projected market adjustments 2008 & 2009 may well become some of our best historical markets.
There have been recent reports that real estate agents are leaving the business in record numbers. I heard that ten percent of the agents scheduled to renew their dues and licenses in July left the biz.
They’re back to their old jobs, or on to something new. We all wish them well.
Realistically, real estate is a tough and serious business. During the good times, people flock to careers in real estate looking for easy money.
This is certainly not the time for casual opportunists to pursue or continue careers in real estate.
I find it fascinating that no one was capable of predicting when the market would heat up in 2004. It was almost of if someone flipped a light switch in a room to the on position and demand exceeded supply instantaneously.
By the same token, everything was going relatively smooth in 2005. The only voices of concern said that astronomical appreciation rates were unsustainable.
They expected demand to continue with sellers moderating their pricing expectations.
The same light switch was flipped from on to off, and listing inventories soared and days on the market went from hours to months almost overnight.
As the market continues to adjust from frenzied to normal, some people are reluctant to become players.
The press is full of stories of reluctant buyers not sure of the ultimate direction of the market. No one is talking about the future. They’re stuck in idle rather than taking any leadership. No one has bothered to pay attention to the reports of 1947, 1969, or 1985.
Here’s what we know:
1. Phoenix is still an ideal destination.
2. We’re blessed with pleasant weather and a lack of natural disasters. Compared to other areas in the Country, our economy and future prospects are bright. Companies will continue to relocate here.
3. It was bitter cold again this winter in Buffalo, Boston, Chicago, Minneapolis, Calgary and hundred of other cities across North America.
4. They all watch TV and read newspapers, and will yearn for our sunny, clear weather and our reputation for friendliness and western hospitality.
5. There may be no better time than now to buy. Interest rates are relatively low. There are lots of listings to choose from and prices are more realistic.
6. Before we know it, we will be in another boom for Arizona real estate. No forms of radar will show it coming, it will just happen like it has before.
7. The economists and PhD’s can only issue reports in hindsight. Time proves they are mostly wrong.
Ask any of the doom & gloomers if they are hoping for a housing crash. Ask them why they are rooting for people get hurt financially. In fact, ask a housing bubble blog owner the purpose of their blog. I am quite sure they won't answer.
Fact is, people in their own lives and their own experiences have done extremely will in all sectors of real estate and will probably do just fine going out.Let's take Phoenix, AZ: Maricopa county will double in size by 2030! Every school, home, gas station, Starbucks, dry cleaner in the valley will double its numbers in the next 15-25 years. Would anyone conclude therefore, that real estate is somehow doomed? Well, they'll say yes, in the short-term.
It's kinda of hard to make money in the stock market when the averages are going down. And, not too hard when the averages are going up. Not so in real estate. It simply doesn't matter what the median price increases are anywhere because it's so easy to beat those averages with just a hint of knowledge and sanity.
In fact, prices have appreciated here an average of 8.9% per year for 30 years. That's 44% compounded over that period of time with 20% down! And, that's just the average...no one would dare make the same claim in the stock market...
Now Read: The Pompous Prognosticators Hall of Fame
The press has also given considerable coverage to the reluctance of consumers to spend money during what is perceived to be challenging economic times.
You can’t believe everything you read. The experts are often wrong.
Time Magazine reported, “The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.” They wrote that in 1947.
Business Week said, “The goal of owning a home seems to be getting beyond the reach of more and more Americans.” When they wrote that in 1969, the average price of a house was $28,000.
The Miami Herald wrote, “If you are looking to buy, be careful. Rising home values are not a sure thing anymore.” That sage advice came in 1985.
Money Magazine said, “Most economists agree . . .a home will become little more than a roof and a tax deduction, certainly not the lucrative investment it was .” That was their best advice in 1986.
"...for now, the frothy buying conditions in some of the nation's biggest housing markets, especially for high-end-homes, worry economists, who remember how the housing market crashed in the late 1980s after some markets overheated." The Wall Street Journal (bottom of page), March 6, 2000
As Paul Harvey would say, here’s the “rest of the story”.
Real estate is and will be one of the safest and best investments most people have.
The doom and gloom folks are doing their best, but time will prove, as it has time and time again, that they are wrong.
They are entitled to their opinions, but there are other facts you should know. Many industry experts see the 2007 real estate market as a mirror of the 2003 market. By some standards, that’s disappointing. But, the truth is that 2003 was the second best real estate market metropolitan Phoenix has ever seen.
2004 and 2005 was frenzied and unrealistic, so anything “normal” seems slow by comparison.
Even with some projected market adjustments 2008 & 2009 may well become some of our best historical markets.
There have been recent reports that real estate agents are leaving the business in record numbers. I heard that ten percent of the agents scheduled to renew their dues and licenses in July left the biz.
They’re back to their old jobs, or on to something new. We all wish them well.
Realistically, real estate is a tough and serious business. During the good times, people flock to careers in real estate looking for easy money.
This is certainly not the time for casual opportunists to pursue or continue careers in real estate.
I find it fascinating that no one was capable of predicting when the market would heat up in 2004. It was almost of if someone flipped a light switch in a room to the on position and demand exceeded supply instantaneously.
By the same token, everything was going relatively smooth in 2005. The only voices of concern said that astronomical appreciation rates were unsustainable.
They expected demand to continue with sellers moderating their pricing expectations.
The same light switch was flipped from on to off, and listing inventories soared and days on the market went from hours to months almost overnight.
As the market continues to adjust from frenzied to normal, some people are reluctant to become players.
The press is full of stories of reluctant buyers not sure of the ultimate direction of the market. No one is talking about the future. They’re stuck in idle rather than taking any leadership. No one has bothered to pay attention to the reports of 1947, 1969, or 1985.
Here’s what we know:
1. Phoenix is still an ideal destination.
2. We’re blessed with pleasant weather and a lack of natural disasters. Compared to other areas in the Country, our economy and future prospects are bright. Companies will continue to relocate here.
3. It was bitter cold again this winter in Buffalo, Boston, Chicago, Minneapolis, Calgary and hundred of other cities across North America.
4. They all watch TV and read newspapers, and will yearn for our sunny, clear weather and our reputation for friendliness and western hospitality.
5. There may be no better time than now to buy. Interest rates are relatively low. There are lots of listings to choose from and prices are more realistic.
6. Before we know it, we will be in another boom for Arizona real estate. No forms of radar will show it coming, it will just happen like it has before.
7. The economists and PhD’s can only issue reports in hindsight. Time proves they are mostly wrong.
Ask any of the doom & gloomers if they are hoping for a housing crash. Ask them why they are rooting for people get hurt financially. In fact, ask a housing bubble blog owner the purpose of their blog. I am quite sure they won't answer.
Fact is, people in their own lives and their own experiences have done extremely will in all sectors of real estate and will probably do just fine going out.Let's take Phoenix, AZ: Maricopa county will double in size by 2030! Every school, home, gas station, Starbucks, dry cleaner in the valley will double its numbers in the next 15-25 years. Would anyone conclude therefore, that real estate is somehow doomed? Well, they'll say yes, in the short-term.
It's kinda of hard to make money in the stock market when the averages are going down. And, not too hard when the averages are going up. Not so in real estate. It simply doesn't matter what the median price increases are anywhere because it's so easy to beat those averages with just a hint of knowledge and sanity.
In fact, prices have appreciated here an average of 8.9% per year for 30 years. That's 44% compounded over that period of time with 20% down! And, that's just the average...no one would dare make the same claim in the stock market...
Now Read: The Pompous Prognosticators Hall of Fame
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