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I think emotion has more to do with Real Estate than supply and demand ever will

By
Real Estate Broker/Owner with Steelbridge Realty LLC

 

I think emotion has more to do with Real Estate than supply and demand ever will

in 2005 we were buying houses when we should not have been

in 2007 we should be buying houses and we are not why is that....Socioeconomics

I quote 

Socioeconomics typically analyze both the social impacts of economic activity and economic impacts of social activity. In many cases, however, socioeconomists focus on the social impact of some sort of economic change. Such changes might include a closing factory, market manipulation, the signing of international trade treaties, new natural gas regulation, etc. Such social effects can be wide-ranging in size, anywhere from local effects on a small community to changes to an entire society.

 

many times we fool ourselves with numbers, Gaussian "bell curve type" number models were used to predict, the market to keep rolling in 2005

 

Guess what it did not happen

why...

a change ion the social mood

 in 2005 risk was the catch word, now its fear

pop culture has a lot to do with this, they also feed these trends, look at the movies and music

Dark and scary right now, because....that's what we want

we need to stop blaming the "flippers" agents, mortgage broker, builders, its more the times that caught up, than misdeeds

 There were plenty of misdeeds to go around though

 

More quotes of wisdom

Whether market timing is ever a viable investment strategy is controversial. Some may consider market timing to be a form of gambling based on pure chance because they do not believe in the possibility of predicting future financial prices. The efficient market theory suggests that financial prices often exhibit random walk behavior and thus can not be predicted with consistency. Some consider market timing to be sensible in certain situations, such as an apparent bubble. However, because the economy is a complex system that contains many factors, even at times of significant market optimism or pessimism, it often remains difficult, if not impossible, to pre-determine the local maximum or minimum of future prices with any precision; a so-called bubble can last for many years before prices collapse. Likewise, a crash can persist for extended periods; stocks that appear to be "cheap" at a glance can often become much cheaper afterwards before either rebounding at some time in the future or heading toward bankruptcy.

 

some more to ponder

In finance, the efficient market hypothesis (EMH) asserts that financial markets are "informationally efficient", or that prices on traded assets, e.g., stocks, bonds, or property, already reflect all known information and therefore are unbiased in the sense that they reflect the collective beliefs of all investors about future prospects. Professor Eugene Fama at the University of Chicago Graduate School of Business developed EMH as an academic concept of study through his published Ph.D. thesis in the early 1960s at the same school.

The efficient market hypothesis states that it is not possible to consistently outperform the market by using any information that the market already knows, except through luck. Information or news in the EMH is defined as anything that may affect prices that is unknowable in the present and thus appears randomly in the future.

 

funny part about most of these quotes, these schools of thought. They come from outside the business world

Those than can do, those that can't teach

in the end I leave you with

Harvey McKay's three secrets to success

1. Never give up!

2. Never give up!

3. Never give up!

 

MAKE IT A GREAT DAY

Comments (2)

Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Jeff, I'll give you another "truism" of investing from Wall Street: Watch the "odd lot" buyer and do the opposite. This means to watch the small investor who doesn't buy stock in 100 share increments. When he buys it's time to sell. When he sells it's time to buy.

Right now the small guy is trying to sell his real estate. That is a "buy signal" if I've ever seen one.

Bill Roberts

Oct 10, 2007 05:08 AM
Rosemary Brooks
BMC Real Estate - 209-910-3706 - Stockton, CA
The Mother & Daughter Realty Team
Time to buy - hello buyers - time to buy. We need to keep educating the buyers that it is the right time.  Having their ducks in a row is required this time around(unlike 2005) but it is time to buy and get the best deals all the way around.
Oct 10, 2007 05:15 AM