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Sentiments shared by many during the real estate boom

By
Real Estate Agent with Reaction Realty Executives

So many people that I know personally and care a great deal about were driven to purchase a home in the last couple of years because they thought it was a good investment. Many of them shared the sentiment that if they hadn’t done so, they would “miss” their opportunity to ever purchase a home. Many saw real estate values soaring out of their reach of affordability and felt compelled to act before it was “too late.”

A sense of urgency hung in the balance because they saw people all around them profiting from their real estate gains. To make matters worse, Real Estate Gurus were touting get rich schemes. Guys like Robert Allen with his no money down tactic- that landed him in Federal Prison in the mid 80’s for tax evasion, was suddenly back in vogue and so was Robert Kiyosaki; his Rich Dad Poor Dad book was one of the best selling books in America along with a score of other real estate related books at the time. As many of you already know, he was shown to have done very little real estate investing or posses any other investing experience. He made most of his fortune through becoming a “guru.”

Owning real estate was positioned at the time as the best investment that you could make, because it could never go to zero unlike a stock, making the reference to the last bubble in recent memory. The sense of urgency compelled some of my friends and acquaintances to take out mortgages they clearly couldn’t afford and, worse yet, loans they barely understood. This was further compounded by the willingness of the mortgage industry to lend money to these people who could not afford it- the word “subprime” was born during this time. The lenders too were drinking the same "Kool-Aid" that many shared- homes would forever increase in value. 

 

 

Looking back, it’s as if people went from investing in tech stocks in the early 2000’s to real estate in the mid 2000’s. During the real estate boom, I remember everyone talking about Real Estate much like they did about tech stocks in the late 90’s. From boom to bust; unbeknownst to many, the money was just following the next bubble.

My husband and I purchased our home right before the real estate boom in 2000 and sold a significant portion of our positions in our 401 (k) for a down payment; which were heavily loaded with tech stocks (as most mutual funds were at the time) right before the Dotcom crash in order to buy our home. I am no psychic and I’m not going to lie to you and tell you that we timed the market, it was just coincidental, we just didn’t get caught up in the frenzy that is now affecting so many we know and love. We both just finished business school; we have our MBA’s in finance, and are just now getting into Real Estate. I hope that our timing serves us well.

 

Lorena Westervelt
Van West Realty - Greenville, SC
Co-Founder/Co-Owner

Hello, welcome to Active Rain! This seems like a wonderful environment to network as well as learn from others. I hope you enjoy yourself and participate often in the Active Rain environment!

Sep 08, 2008 09:25 AM
Kirk Westervelt
Van West Realty - Greenville, SC Realtor -Short Sale Expert! - Greenville, SC
Kirk Westervelt, Broker In Charge, Van West Realty - CDPE - Short Sale Agent - Home for Sale - Greenville, Simpsonvil...

Hello, welcome to Active Rain. I encourage you to learn from others, educate others, enjoy yourself and try to log in and join us in the Active Rain community as frequently as possible. I look forward to your future blogs! Take care, --Kirk.

Sep 08, 2008 09:34 AM
Steve Vennemann-Hennepin-Dakota-Anoka contract for deed property-Ramsey-MN
BoardWalk Premier Realty INC - White Bear Lake, MN

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On behalf Http://www.mnlakeplace.com  we are happy you became a member of action rain and we wanted to welcome you to http://www.actionrain.com . It is a very good site to learn and network.

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Sep 09, 2008 12:19 PM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

We invite you back to ActiveRain in 2016!

    Much has changed since your last visit to ActiveRain.  I encourage you to take another look at the website. 

    Surf some blogs, leave some comments.  Better yet, post a Blog.

    Best to you!

Feb 15, 2016 12:26 PM