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How to Keep a Positive Perspective in a Negative Market

Real Estate Agent with F.C. Tucker Company

I am sure that you all have heard the expression, "Attitude is everything." This is so true. Right now, it is simply your attitude and mentality that will give you the edge over others who are trying to invest in this highly volatile market and buy a home. You've undoubtedly heard the importance of thinking positive and having the right attitude. Most people are smart enough to know that this statement is true. Some people reading this will argue that a positive attitude doesn't always work. Well, maybe not, but I know one thing for sure...negative thinking and a negative attitude NEVER works! So your only choice and your only chance for success in finding a new home in today's market are to pick the positive things in life and maintain a positive attitude at all times!

I once read a fortune cookie that said, "An optimist is someone who tells you to cheer up when things are going his way". I know that if you are reading this, times may be difficult and you may need serious answers to your burning questions such as, "Will my new home be a sound investment and grow in value?" There are many answers to this question, but first I need to explain to you some items of relevance.

About every ten to twelve years, real estate values on the average tend to double in many areas. As an example, in the 1920's, the original colonial homes sold for just under $2,500 in Long Island, New York. Since then, real estate prices have doubled almost 8 times in the last 80 years! That averages out to a 100% increase approximately every ten years. Now that may not be the case here in central Indiana, but most homes in central Indiana historically have increased on the average ranging from 35% - 65% over a period of ten years. An interesting note to this that about every ten to twelve years, real estate values must correct before they enter their next growth cycle.

The process of real estate value correction is three steps forward and one step back. For example, imagine a major value increase occurring in three steps of one-third parts each. The last market cycle of the 1980's was one in which real estate values nearly doubled, followed by a correction of the early 1990's, which equated to a 20-30% decrease over a three to five year period. This cycle was then followed by the post 2000 cycle boom where values increased substantially from the high point of the previous cycle. We are now in NATURALLY OCCURING phase of the correction in the cycle. This essential and beneficial adjustment gives the market a time to reflect and re-gather momentum and strength for the next major increase in value of the cycle! Please rest assured that this has occurred time and time again because the long-term demand for housing is still growing at an exponential rate based on population growth to almost double in the United States by the year 2050! These people will be in demand for a place to live, thus driving prices higher as it naturally has for the last 100 years!

Since we now know that real estate values will grow based on past history, it's not a matter of if; it's just a matter of when. If you are planning on staying in your perspective home for more than five years, now is the time to buy! If you are still a little apprehensive about purchasing a home, would you by your parents' home for what they purchased for it? I bet your answer would be "YES"!

How else do I maintain this positive attitude? I'll answer more in next weeks article!!

Keep that " Can do"attitude!

Jeanette Meggers
Keller Williams Realty Signature - Rockford, IL

Thanks, Kay.  A good article inviting us to an even better attitude.  If you get a chance take a look at my blog for today.  I think we're on a parallel thinking path.  Have a great one.

Mar 17, 2009 01:24 AM
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis

Excellent post Kay.  You are so right about market corrections.  If you put the gains and losses over the years all into perspective the news is much, much better than our pals in the media make out.  One thing that cannot be calculated into where we are in the market today, vs. the long haul is the poor lending practices that went on way too long that caused much of our recent pain. 

Mar 17, 2009 03:41 AM