I've Been Telling You to "Ignore the Headlines!"

Hey Folks!

How many of you have read the February 25th, Time magazine article entitled, "Ignore the Headlines" by Dan Kadlec?  You've got to read this one.  Mr. Kadlec acknowledges all the media doomsaying, and the tendency of the average American toward inertia.  He then poses the cogent question, "...what, exactly are you waiting for?"

Kadlec quotes the renowned investment consultant, Peter Lynch,  "in spite of all the great and minor calamities that have occurred...all the thousands of reasons that the world might be coming to an end..." and aptly adds, "there has rarely been a moment in history when you couldn't scare yourself into doing nothing."

Albeit more eloquent, this is precisely what I've been saying about the current real estate market.  Far too strong is our average tendency to behave like sheep by following the movement of the herd.  If the media screams disaster, we typically believe them outright without further inquiry, and respond accordingly. 

Interestingly, the media intimately knows this, and as always, knowledge correctly applied, is power.  Just as one who shouts "Fire!" in a crowded theater, could reasonably predict the reaction of the crowd, the media, (or more correctly stated, those who control the media) can very reliably anticipate the response of the populace to whatever cry they make.  This is the reason for the cry in the first place.  That, if nothing else, should be serious food for thought.

Anyway, as you may recall, I've counseled many of you to resist the urge to "buy with the herd".   An important corollary is not to join the herd in paralytic fear.  Mr. Kadlec quotes John D. Rockefeller in making the same point:  "The way to make money is to buy when blood is running in the streets."

Both Kadlec's and Rockefeller's reasoning is sound, especially as applied to the current situation in real estate.  The article references Jim Svinth of Lending Tree who said, "The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher,"  namely, rising interest rates.  Folks, it isn't a question of whether interest rates will begin to rise.  It is only a question of when.  When that happens, sellers will become less pliable, real estate prices will rise, and opportunity for "buying low" so that you can later "sell high", and make a profit, will immediately begin to diminish.

Those of you who've been perhaps a bit overly adherent to caution, might want to have a second look at your "hole card" and begin to nose around for opportunities to invest in real estate that are here today, but may well be gone tomorrow.  'Till next time, it's

Dave@PrescottHomeInfo.com