People love to speculate.
What's the new fall color? Who's the new "it" person? It girl. It guy. It singer? OK, we're less interested in the I.T. guy. (I know this. I've been one.)
We speculate on taste, trends and we really love to predict the next financial disaster. Don't believe me? Google these things. Or don't. I've done it for you.
"When is the next recession?" 57,000,000 results
"When is the next housing crash?" 67,700,000 results
"When is the next financial crash?" 174,000,000 results
That's millions of results. Not 57 or 67 or 174 people posting a million times each.
So if we're so interested in the topic, let's try to set some rationale regarding this fascination.
1) We've been doing so well for so long that it just seems like the low has to follow the high. Let's take a look at stocks. The bull market is nine years old. This is a record. If what goes up must come down, it has to come down. And it sort of has. A little bit (percentage wise). Still, you'll find quite a few people who say we're on borrowed time and quite a few others who will disagree.
2) Home prices have been going up up and away. But some may wonder if, like the song says, if it's in a beautiful balloon. We had a bubble before and it t was so ugly. If it were to happen again, where would it be and how severe could it be? One good place to check is the historical record. If history repeats itself, it might be nice to know what it looked like last time. Here's a helpful graphic by the helpful humans at My Money Blog who used data from Core Logic and the Washington Post.
It's Halloween time. It's ok to scream. That was a frightening time and I wouldn't blame you if you don't want to go through that again. The upside? Homes became more affordable for a brief window in time and the prices went back up again. In most cases they are higher now than they were before.
Moral of the story. We will always have peaks and valleys. As long as you can afford the home you are looking for, you are probably going to be fine. Just put the blinders on a bit through the valley. Think of your house less as an investment and more as a home. And, if history does repeat itself, your investment will be made good by time.
Also, if you're interested in knowing why purchasing is a great investment, read my blog post "Investment Mystery Solved- After 16 Country, 150 Year Investigation."
Chuck Willman is a real estate agent, investor, and speculator based out of the very beautiful state of Utah.