Coulda, Woulda, Shoulda — Don’T Let The Market Scare You Off

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Have you ever said the words, I Could Have, I Would Have, or I Should Have? (Coulda, Woulda, Shoulda.)

The bet is that most of you may have stated at least one of the haves at some time in your life.

On Feb. 23, 2009 you coulda bought Bank of America (BAC) stock for $4.47 a share.

It is now hovering between $11 and $12 a share.

On Feb. 20, 2009, Wells Fargo Bank (WFC) was trading for less than $10 per share and is now trading between $24 and $27 per share.

On those trading days, you would not have bought at the lowest price for the year, but would those stocks have been a good buy on those dates? (BAC low for the year was $2.53 and WFC was $7.80.)

You coulda bought, you shoulda bought, but would ya have bought?

With all the government and media rhetoric about banks, who in their right mind would have bought bank stocks? Too risky!

Thinking back, did you really believe that the banks would go under? Maybe? But this is a real estate column so let’s move on.

Beginning in 2005, many real estate appraisers and real estate brokers experienced what car dealers call sticker shock.

We could not believe what was happening to real estate prices during that period.

People were standing in line to buy property.

We have gone from a lack of supply to an abundance of inventory.

In 2005, buyers were emotionally charged to buy property being afraid that they would miss out.

Having experienced numerous recessions and business cycles, we have seen this before.

Today, buyers are afraid to buy because they worry that they may get a better deal later or fear that real estate will never be a good investment.

As a rule, real estate will not give you a three-month return like Bank of America or Wells Fargo stock coulda, but the practical side is that more wealth has been created historically in real estate than through any other investment vehicle.

Today, we have opposite sticker shock with prices being unbelievably low and in many instances, below replacement cost.

The question is; will we ever see real estate values like we have today?

Is real estate a good investment if you can buy below asset value (replacement cost)?

With interest rates and property values at historic low points, will you look back in five years and ask yourself if you coulda or shoulda? But did ya? (My apologies to all my former English teachers.)

Ray Pugel is a designated broker for Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.

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