Real Estate Optimism in the New Year?
Another New Year dawns. For many, the last several trips around the sun ended with a sense of relief when they were finally over. Will this year be any different? Some may feel the way baseball fans do every spring – this is a championship year! But is it? Or will they just see their hopes dashed yet again? Others cling to the pessimism of the recent past. Which will it be?
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Trying to decipher the myriad facts and figures released ad nauseum can make you, well, nauseous. Statistics can be analyzed, digested, and manipulated to fit whatever you may happen to believe. If you believe that real estate is going to decline further – there’s a stat for that. If you feel that things have turned around and are on the way up we can find statistics to fit that theory. Expecting more of the same? Do you want fries with that conclusion?
So how do you make sense of all the numbers? You don’t. Accept the fact that there will always be contradictions in any market based on the statistics being compared. It’s really only in hindsight that you find certainty. There is a saying on Wall Street that Bull Markets end when the last person buys and Bear Markets are over when the last person sells. That’s true in real estate as well. Unfortunately we have no idea who that person is. But there is something we can pay attention to, how people feel. That’s what is called consumer confidence.
Business news reports often make mention of consumer confidence, but what is it? Essentially it’s just a measurement of how people are feeling about the economy. Rather than following the official report issued by the The Conference Board, use your own. Pay attention to what people around you are saying. Are they feeling more or less optimistic? When real estate was doing its crash & burn there were plenty of clinging to the false hope that things would soon turn around. More recently it seems that everyone has a reason for things getting worse. But is that changing?
Is This Our Year?
I don’t want to sound like a beleaguered Chicago Cubs fan, but in my neck of the woods things seem to be a little different. There was even a report last month that showed Las Vegas real estate being one of two markets that showed price gains. Of course that’s just a meaningless statistic at the moment, but a market that has been hammered will cling to whatever good news it can get. But there’s more than just a report.
There seems to be a growing sentiment here that it’s safe to buy a house again. Real estate agents tell me that they are seeing more interest from retail buyers rather than investors. That’s a key element. Investors can make money in any market by adjusting their strategy to fit the circumstances they are faced with. Retail buyers think differently and they may be starting to return in larger numbers than in the recent past.
For sure, there are a great many reasons why real estate may remain in the doldrums. But the worst may finally be behind us. The doom-and-gloom crowd will continue to talk about the lack of jobs, high foreclosure rate and the phantom inventory of foreclosures that the banks are allegedly holding on to. But perhaps that bank conspiracy was merely an inefficient bureaucracy, maybe the worst of the foreclosure mess is behind us, and maybe the economy will actually start to create jobs again. It’s a New Year – we can dream can’t we?
Facts are stubborn, but statistics are more pliable. – Mark Twain
Photo Credit: hisgett