It’s Déjà vu All Over Again in Market News

Pick up the morning paper and there they are – the headlines declaring doom and gloom in the real estate market. Log onto the Internet and there’s CNN beating the same drum: new home sales plummeted in January all around the country. And you can’t have missed the little sleigh ride that blue chip stocks have taken in the last few days. Everywhere you turn, bad news for anyone buying or selling real estate, right?

Not so fast. Could it be that reporters need to write articles that sell newspapers? That online writers need to come up with ever more dire-sounding reports in order to keep those clicks coming? Haven’t we been here before?

 
Headlines hit hot buttons, and there’s nothing quite as attention-getting as something that might hit you in the bank account. So it ’s natural for people to worry about their biggest investment – their home. What’s important to remember is something else about the stock market or any investment: take the long view. Most people buy a home planning to stay in it for at least a few years. In that time many things will change. Even after a catastrophe like 9/11 that hit the market hard, stocks rebound as confidence in the basic strength of the economy was rebuilt.

Housing prices go up and down, too, but over time real estate is still an excellent investment. Unlike stocks, though, this investment doesn’t just sit there – you live in it, and it becomes so much more than a piece of your nest egg. When the Dow took a dive the other day, I had one client who thought hard about canceling his contract. But with just a bit of reflection, he decided to go ahead with the purchase because he realized that he is buying a home – a place to live – and not just an investment vehicle. Another client is looking for a home in the $650,000 range that he plans to be in for five to seven years and then upgrade. He recognizes that between now and then there will be many market fluctuations, but in the meantime his family needs a place to live. Whatever the headlines, he knows that making a good choice now will help him avoid significant down-side risk when it comes time to sell.

Today’s real estate market is no different from any other in one area: you always need to consider the economic impact of your choices. But making a wise choice on the location and the type of property you buy can help limit any negative impact of future declines in the market. Cycles are a part of life. With planning and considering alternatives, you can ride them out with a minimum of stress.

The reality is that no matter what the current economic environment, good houses still sell and good agents still find good deals for their buyers.

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