Good Morning
MOJO,
I’ve been thinking a lot this week about the country’s financial crisis and the bailout of Wallstreet by Big Brother. I even heard someone on the radio refer to it now as the “People’s Republic of Wallstreet”. It is interesting to me that the government would save the banks who loaned the people (who never should have had loans) money while leaving the unfortunate borrowers to fend for themselves. I have a lot of sympathy for the people who couldn’t have otherwise bought a home, bought one but are now in trouble. Who doesn’t want to own a home? Shame on those who bought more than they could reasonably afford. Where will the bailouts end? No one knows, but it smells a lot like the Savings and Loan bailouts of the 80’s. The greedy fat cats received their gains while the country suffered. Was this that hard to see coming? Not really. Those of us in the industry everyday marveled at the loans being handed out. If you could fog a mirror….you could get a loan for a home. Most of our issues in the real estate sector are that we borrowed buyers from the future, buyers who weren’t really ready, buyers who had no track record for paying money back. Now the future is here. The piper will be paid.
Now the good news, I am asked everyday “How is the real estate market?” I guess I should expect that question from all the negative press with which we are being bombarded. The answer is that the real estate market is absolutely fantastic now. Better than it has ever been. How can that be? Don’t you read the papers? Watch the news? Look, interest rates are still at historic lows and coupled with low home prices and plenty of choices. We’ve never experienced those conditions together before. Never. But you ask…. “Aren’t sellers in trouble? Yes….some are. But you have to remember that in every deal there is a buyer and a seller. 50% are buyers. That means that for 50% of the people involved in any transaction this is a fantastic market. Fantastic. Never been better. What about the sellers? Well, statistics show that 62% of those sellers will be buying another home. That’s 31% of the total participants. Add that to the 50% who were the fortuitous buyers and you have 81% of the market benefiting from the current conditions. That’s right, for 81% of the people involved in buying or selling a home the market is phenomenal. Does that sound bad? Why don’t we hear about this? Bad news sells. Ask yourself how many positive stories you saw on the news last night?
If 81% of the people benefit right now, why isn’t everyone buying? It really is an interesting phenomenon. Two years ago when you had 5 choices in homes and no negotiating leverage, everyone wanted to buy. Now when you have 40 choices, low interest rates and the ability to call the shots, where are all the buyers? They call it a buyer’s market for a reason. It’s a great time to buy.
By and large, people feel a sense of comfort when they can look around and see that other people are doing what they are doing. If they see others buying homes, they feel that it must be safe to buy a home. If they aren’t buying, there must be a reason. Much like the water buffaloes we’ve seen in those crocodile videos on Animal Planet and Wild Kingdom, the herd stands back to see if the thirstiest get eaten before they mosey down to the watering hole. Then it’s a free for all. They really don’t even wait to see if they get eaten or not. They just rush right on in behind them. Safety in numbers. For the most part, people do the same. They do what they see other people doing. They feel that there is safety in hanging with the herd. The laws of economics say that high demand drives up prices and low demand forces prices down. The difference between crocodiles and economics is that by sheer numbers it is be safer when it come to crocodiles because each croc can only catch one water buffalo. He will be busy then. No longer a threat. The market on the other hand can catch all of the water buffaloes who participate regardless of how many there are. The market will not be busy eating one while all of the others pass safely by. It can devour them all.
The winners in economics do the opposite of what the herd does. Real investors are making their moves now. They bet against the herd and win 90% of the time. I had a conversation with my 15 and 16 year olds last night and advised them that when financial matters are concerned, look around and see what the majority of other people are doing and do the exact opposite. You will be right 90% of the time. You will be using economic law to your benefit. When supply is up and prices are down, you buy. When supply is down and prices are up, you sell. Buy low, sell high. We’ve all heard it. If you didn’t know now is the time to buy low….you do now. Get out there and take advantage of the market conditions. Be bold and be a winner. Take it from Warren Buffet, “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Get your MOJO on and have a great week!
Dustin Kimberlin
V.P. Broker Associate
The Dustin Kimberlin Team
Keller Williams
Clients’ Choice
Office 719 302-1810
Cell 719 310-5366
Fax 719 481-2292
Dustin@HomesCS.com
http://www.homescs.com/
You can have everything in life you want, if you will just help other people get what they want. Zig Ziglar
I’ve been thinking a lot this week about the country’s financial crisis and the bailout of Wallstreet by Big Brother. I even heard someone on the radio refer to it now as the “People’s Republic of Wallstreet”. It is interesting to me that the government would save the banks who loaned the people (who never should have had loans) money while leaving the unfortunate borrowers to fend for themselves. I have a lot of sympathy for the people who couldn’t have otherwise bought a home, bought one but are now in trouble. Who doesn’t want to own a home? Shame on those who bought more than they could reasonably afford. Where will the bailouts end? No one knows, but it smells a lot like the Savings and Loan bailouts of the 80’s. The greedy fat cats received their gains while the country suffered. Was this that hard to see coming? Not really. Those of us in the industry everyday marveled at the loans being handed out. If you could fog a mirror….you could get a loan for a home. Most of our issues in the real estate sector are that we borrowed buyers from the future, buyers who weren’t really ready, buyers who had no track record for paying money back. Now the future is here. The piper will be paid.
Now the good news, I am asked everyday “How is the real estate market?” I guess I should expect that question from all the negative press with which we are being bombarded. The answer is that the real estate market is absolutely fantastic now. Better than it has ever been. How can that be? Don’t you read the papers? Watch the news? Look, interest rates are still at historic lows and coupled with low home prices and plenty of choices. We’ve never experienced those conditions together before. Never. But you ask…. “Aren’t sellers in trouble? Yes….some are. But you have to remember that in every deal there is a buyer and a seller. 50% are buyers. That means that for 50% of the people involved in any transaction this is a fantastic market. Fantastic. Never been better. What about the sellers? Well, statistics show that 62% of those sellers will be buying another home. That’s 31% of the total participants. Add that to the 50% who were the fortuitous buyers and you have 81% of the market benefiting from the current conditions. That’s right, for 81% of the people involved in buying or selling a home the market is phenomenal. Does that sound bad? Why don’t we hear about this? Bad news sells. Ask yourself how many positive stories you saw on the news last night?
If 81% of the people benefit right now, why isn’t everyone buying? It really is an interesting phenomenon. Two years ago when you had 5 choices in homes and no negotiating leverage, everyone wanted to buy. Now when you have 40 choices, low interest rates and the ability to call the shots, where are all the buyers? They call it a buyer’s market for a reason. It’s a great time to buy.
By and large, people feel a sense of comfort when they can look around and see that other people are doing what they are doing. If they see others buying homes, they feel that it must be safe to buy a home. If they aren’t buying, there must be a reason. Much like the water buffaloes we’ve seen in those crocodile videos on Animal Planet and Wild Kingdom, the herd stands back to see if the thirstiest get eaten before they mosey down to the watering hole. Then it’s a free for all. They really don’t even wait to see if they get eaten or not. They just rush right on in behind them. Safety in numbers. For the most part, people do the same. They do what they see other people doing. They feel that there is safety in hanging with the herd. The laws of economics say that high demand drives up prices and low demand forces prices down. The difference between crocodiles and economics is that by sheer numbers it is be safer when it come to crocodiles because each croc can only catch one water buffalo. He will be busy then. No longer a threat. The market on the other hand can catch all of the water buffaloes who participate regardless of how many there are. The market will not be busy eating one while all of the others pass safely by. It can devour them all.
The winners in economics do the opposite of what the herd does. Real investors are making their moves now. They bet against the herd and win 90% of the time. I had a conversation with my 15 and 16 year olds last night and advised them that when financial matters are concerned, look around and see what the majority of other people are doing and do the exact opposite. You will be right 90% of the time. You will be using economic law to your benefit. When supply is up and prices are down, you buy. When supply is down and prices are up, you sell. Buy low, sell high. We’ve all heard it. If you didn’t know now is the time to buy low….you do now. Get out there and take advantage of the market conditions. Be bold and be a winner. Take it from Warren Buffet, “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Get your MOJO on and have a great week!
Dustin Kimberlin
V.P. Broker Associate
The Dustin Kimberlin Team
Keller Williams
Clients’ Choice
Office 719 302-1810
Cell 719 310-5366
Fax 719 481-2292
Dustin@HomesCS.com
http://www.homescs.com/
You can have everything in life you want, if you will just help other people get what they want. Zig Ziglar
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