Real estate is one of the hot topics of the moment and needless to say, is getting extensive coverage in all of the media venues.
This week’s Wall Street Journal for example, had an article titled “The Future of Home Prices.”
The article told the reader that economic experts are predicting that home prices have bottomed out, or will bottom out in 2009, or maybe in 2010, or certainly by 2012.
It leads a person to wonder if these are the same experts who failed to warn us about today’s economic situation.
Who are these anonymous experts that are being quoted so often?
It seems that most economists are experts in telling us what happened instead of what is going to happen.
The economic geniuses in our government told us last week that we have been in a recession since December 2007.
How many of you knew that before the government told you? How did you know?
So who is smarter?
Some of the wisest mentors have advised us to follow our gut instincts.
And gut instincts are harder to follow today than in the past. Why?
A financial friend issued me a challenge.
Turn off the television news for a week. Don’t watch the network news, FOX, MSNBC, CNN, CNBC or the like, and see how you feel after the week has passed.
He went on to ask me if I realized how many negative impressions you get in a one-hour news show, let alone in a week.
How does that affect your psyche and ability to think and act clearly? How does this impact your ability to act on the opportunities being presented to us today?
Can you remember during the real estate boom how the media was creating a frenzy and people were afraid of buying too late?
So let’s look at real estate.
Real estate prices have dropped significantly through this downturn.
Real estate is on sale!
Interest rates are historically low at 5.5 percent for a 30-year mortgage.
Mortgages are on sale!
On Black Friday we saw crowds lined up at 4 a.m. elbowing each other for sale items because the news media said there would be huge markdowns and great opportunities.
Yet, with real estate at all-time sale prices, the market is trudging along. Could it be because of media induced fear?
What have you learned from past economic challenges and recoveries? In five years will real estate be worth more or less than today? Will mortgage rates be higher or lower?
What does your gut tell you?
Ray Pugel is a designated broker for Coldwell Bishop Realty. Contact him at (928) 474-2216.