Sensational words and statements attract attention and bring in readers or viewers, but this type of conversation can be confusing and misleading. For example, in a Los Angeles Times article out today, part of the first few statements claim that the housing market is “Plummeting” in southern California. Funny enough, they site another article written recently in the same paper where the author noted a “Slight” decline of 2.6% from all-time highs. This we believe, is a good example of over-hyped, sensationalistic, and dangerous commentary that scares and confuses many people. Too many people read a headline or main focus of one (1) article and then repeat, re-tweet, or re-share the news like it was a prophetic truth at face value. We should be smarter, and at least read the entire article. Better yet, read a couple articles. In the go-go, get it quick, and keep moving era we live in, this requires more effort, but it’s usually worth it.
Ever notice that when you hit the brakes on your car going 70 miles an hour that it takes longer to stop than if you hit the brakes going 30 miles per hour? There is actual science to explain this phenomena but suffice it to say that the real estate market has been going pretty fast in recent times, so any slowing seems bleak. Consider again, the car. If you have been driving at 70 miles an hour for any length of time and then you get to a zone where you need to slow down to 55 miles per hour, it can seem like you are at a crawl, when in fact, you are still moving pretty quickly down the road. The real estate market in softening areas like LA, Sacramento, San Francisco, New York, etc are not griding to a hault. When you read further into both articles I mentioned previously, you will note that high-end homes in those areas are still selling at outrageous prices. The same area. You may remember us talking about this recently. Everything is not the same everywhere at the same time.
Clearly, we are seeing a change in the market cycle and that is both normal and necessary. Whether you are buying for your personal residence or for an investment, it might be worth taking a broader if not deeper look at those conditions that influence the market you are considering. Maybe follow a proven formula before rushing to an offer. This is the type of market where we might ask you to consider getting more educated on market cycles. As for us, we are excited for the opportunities that are coming. Just remember however, when the market is usually on the rise and seemingly everyone wants in, so values are high and money is plentiful. When prices drop, more bargains can be had, but the time on market rises, and available money gets more cautious to lend. After decades in the real estate business, we believe that you can make money in any market cycle, you just need to respond according to the conditions of the market for which you are interested. Drown out the noise regarding anything that doesn’t influence said market. Pay special attention to what is influencing conditions in said market.
If you take away anything from this article, we hope that it is an increased resistance to sensationalistic or inflaming headlines before doing more research. We can not and do NOT offer accounting, tax, legal, financial, nor investment advice. Just news and related information.