Post written by Rob Minton
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A while back, I wrote a post about there being some signs of life in some real estate markets here in the United States, a possible sign that a market "bottom" might be in sight in some areas.
I wrote then that if you were thinking about trying to "time the bottom" in your market and invest in real estate, then it was time to get off the fence and get into action.
Well, the median home price nationwide has been creeping up a bit, and inventory levels are dropping, which could signal a coming price stabilization. I wouldn't go so far as to say it's here yet, as markets vary and some probably have a ways to go before bottom. But the fact that home sales have increased for three straight months is at the very least an indicator that buyers have, indeed, "gotten off the fence" to a degree.
In today's news, the Associated Press reported that a survey of Federal Reserve regions showed that there are signs of overall financial stabilization in some areas of the country. Is that anything to get excited about? Not really, but it's at least something to pay attention to.
But I wonder how many people will.
It's weird that during the real estate boom, when speculation and the euphoria of crazy rates of appreciation were wild, that people didn't seem to want to listen to those who were predicting a crash.
Some analysts saw the signs early and tried to warn people. Did everybody listen? No. Same goes for the stock market, as renegade analysts called the financial sector crash long before it happened. Did investors listen? Not really. Naysayers were brushed off, and it was as if the good times would last forever.
Had every investor paid attention to the signs then, not nearly as many people would have lost as much as they did. And here's the thing: If people don't heed the signs now, they will lose again.
Just as the doomsayers who predicted the crash were scoffed at back then, those who are pointing to signs of recovery now do so at the risk of sounding foolish. That's what I don't get.
When things were going well, nobody wanted to listen to anything that wasn't positive. Nobody wanted to believe that things could turn for the worse. But now that things are bad, it's as though nobody wants to listen to anything positive; nobody wants to believe that things are going to get better. It doesn't make sense to me.
It must be some kind of human nature thing -- when things are good we roll around in positivity. And when things are bad, we wallow in negativity. It seems as though we'd be better off if the opposite were true, and the best investors are the ones who are guarded when everybody else is giddy, and see the positive while everyone else sees the negative.
So ignoring the signs on the way down cost investors money. But I can tell you this: Ignoring the signs on the way up, and not participating in the recovery, will cost investors again.
Don't pay twice. Pay attention to the signs this time.
i like what you said... "When things were going well, nobody wanted to listen to anything that wasn't positive." this doesn't make sense to me either. most of the time people tend to ignore what is really happening because they think they've got all what they need. until something went wrong. but i hope AP is correct by saying signs of overall financial stabilization is showing. something to pay our attention to. thanks
Posted by: Alex Lim | July 30, 2009 at 04:20 AM