I was convincing myself the other day while I contacted an architect to make changes to plans that she had already drawn up for me in 2005 that the market was "coming back". I had it in my head that the bounce in sales I saw these past six months was proof that the economy was strong. It was proof that the buyer's market was over and that a normal market was here. I'm not sure which of the next two events proved me wrong.
First my attorney warned me that she heard we would have a rough market for another three years. The next day...yesterday...the stock market crashed. We don't call it that anymore...I mean losing over 400 points on the Dow in a few days is no longer a big percentage of value...but for the sake of this blog and sensationalism let's say it crashed. Whatever is said people lost lots of money in the market this week.
So where did the money go? Like when the real estate market declines...where does the money go? Nowhere. It never existed except on paper. However, people still don't like it. Money they thought they had they now find out is no longer there. Evaporated like water in the sun. Bye. Bye!
So, what's my point today. My attorney might have it right. Last year. A year after Katrina. A year after the beginning of sales and price declines in real estate I kept saying to myself that this is a negative blip and it will be over. Now I'm not so sure.
Years ago (I'm in this industry for 25 years now) I read about up markets and down markets. Up cycles last they said 14 years. I read this in 1991 during the worst year I have seen in real estate. The article also said down markets last approximately 5 years. Now by my calculations if Katrina marked the beginning of this down cycle, and that was two years ago...then unfortunately three more years is needed for us to slog through this down cycle. Not good to hear is it?
The good news is that I made lots of money in those years of 1987 through 1991 and it made me the tough and creative Realtor I am today. The agents that never worked through a down market NEED this to make them better service providers. Rejoice! The down market is here! :-)
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