Remember when buyers were camping out to buy homes... Wake up before you miss this!

By Team Leader Andy Elliott

Now that the market has been flooded, housing prices have dropped, and banks have tightened their financing why should anyone want to buy a home?  That's a great question and one that has some surprising answers that we can get to by first asking a surprising question.

 Why was everyone lined up to buy homes in a seller's market?  Just before the market began to correct itself in 2006 we had about a 3 year window in which housing prices were skyrocketing at an alarming pace.  With low interest rates helping to create additional buyers there was a very high demand on the limited number of homes that were on the market and sellers had all the leverage they could ever want. 

 I remember attending two different lottery ball events at New Tradition subdivisions.  The concept was that everyone who was visiting the subdivision would get assigned a lottery ball.  The builder representative would then draw out lottery balls and the lucky winners had the opportunity to purchase a standard issue home with limited upgrades at a full retail price.  You may have even heard about the builders who actually had buyers camping out to get first dibs on the lot they wanted to build their home on.  This was a crazy environment and buyers were out in full force and excited to lay claim to their very own piece of the American Dream.  It was a great time to buy.... or was it?

 If you actually look a little closer the answer to that question just may shock you.  Supply was low, prices were up, sellers had all the leverage, buyers were outbidding each other and paying over full price, and many sellers were unwilling to make repairs or concessions.  Does that really sound like a great time to buy? 

 Contrast that with today's true buyer's market.  Supply is up, prices are down, buyers have all the leverage, sellers are competing to slash their prices, and home owners are offering all types of concessions and repairs.  Which environment sounds like a better place to shop if you're the buyer?

 Yes, it sounds silly to think that the public mass really operates in a "sheeple" herd mentality but history proves this to be true.  The herd mentality is one of the biggest reasons why very few people ever reach a higher level of success.  Making it to a higher level of success often means thinking and acting at a higher than average level.

 Warren Buffet says it best when he explains his philosophy for buying stocks "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."  This is a simple philosophy and it is very soundly based on the laws of supply and demand.  When others are fearful they are frozen from taking action and capitalizing on opportunity.  When a large number of people refuse to take action on a present opportunity the cost of that opportunity falls.  The result is that an even greater opportunity is made available at a lower cost to the few who are willing to take action to capitalize on it.

 Over the next few years there will be many fearful conversations about real estate and the economy over a hot cup of coffee at the local McDonalds.  There will be many people who are frozen in fear by legitimate setbacks that they have faced in these economic times and there will be those few future wealth builders who rise above it all and take action to lay hold of the opportunity of today's unprecedented investor's market.  Who do you know that will break away from the masses and seize the day?  Will you be one of them? 

 If you have the desire but are forced to say that there is no way you could get the finances to invest, let me ask you this...  If you could get the finances how would you do it?  If you could think outside the box, how could you take advantage of the market to improve your future?  

 Success is the reward of the few who have the courage to break away and do something great when everyone else is captive to fear.  Now is the time to step out while the crowds are in hiding because when you see the buyers lining up for lottery balls and sleeping bags rolling out at the model home it's a sure sign that the opportunity has already passed by. 

Have questions give me a call at 360-256-5526.