Real Estate

Market Ups & Downs are Normal!

“The sky is falling!  The sky is falling!” said Henny Penny.  Ms. Penny’s intensions were good, but her actions were not based on fact.  

I think there’s a lot we can learn from this old children’s story.  It seems we have become a society that loves information to the point of running based on what ever we hear instead of what we know. 

I don’t know about you, but I’m pretty tired of all the negative market hype out there bombarding us with fear based reporting that cause people to run and seek cover.  If you look at history, ups and downs are normal. In fact, without ups and downs our economy would never balance itself; so in essence, we need economic ups and downs.  

Yes, people have lost money in the stock markets.  Yes, 401Ks and home values have dropped.  And yes, the number of unemployed people is on the rise.  The difference between today’s economic drop and past drops is that people have access to more information coupled with the fact that we are more a global society than ever before.  Those two differences play a big role in why the economic markets are responding like they are. Today, governments are treading new ground trying to figure out how they can control what is happening, and so far what they have done has not worked too well.  But does that mean the sky is falling?  

I found several articles on the internet the have the following historical quotes regarding the housing market:  

  • “The days when you couldn’t lose on a house purchase are no longer with us.” (House Beautiful, November 1948)
  • “The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000.” (Business Week,September 4, 1969)
  • “The median price of a home today is approaching $50,000 . . . Housing experts predict that in the future price rises won’t be that great.” (Nations Business, June 1977)
  • “The era of easy profits in real estate may be drawing to a close.” (Money, January 1981)
  • “Most economists agree . . . [a home] will become little more than a roof and a tax deduction, certainly not the lucrative investment it was through much of the 1980s.” (Money, April 1986)
  •  “Financial planners agree that houses will continue to be a poor in vestment.”(Kiplinger’s Personal Financial Magazine, November 1993)
  • “Your house is a roof over your head. It is not an investment.” Ev erything You Know About Money Is Wrong, 2000)
  • “But the real question is, how will [housing prices] look longer term? As I’ve said in the past, I do not think that housing values will be higher five to ten years from now.” (Yale Economist Rob  ert Shiller, quoted in Newsweek, January 27, 2005)

See a pattern???

Historically economic hard times have created some of the GREATEST opportunities for new ventures and new inventions.  Sure, new opportunities carry with them an element of fear.  The key is not to let the fear immobilize you.  Instead, let it motivate you.  Let it force you out of your routine.  If more people would spend their energy thinking of positive ways to over come our economic situation, our economy might recover faster.

Read the story of Henny Penny:  http://www.childrenstory.info/childrenstories/hennypenny.html

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