Soft Patch or Something Else

So we have had some "Ugly" economic news in the last couple of weeks and as an investor you have to ask all the time if you should be changing anything in your business.

Now some of you might be thinking I am saying stop and sit tight and wait for the all clear sign. Let me assure you that nothing ccould be further from the truth.

Let's make sure we are on same page and review just a few of the things going on:

US Economy slowing again, unemployment rate is going up, inflation seems to be building in staples like gas and food.  Europe is just a wreck, Japan as some issues and China is shall we say running hot, the Fed is closing QE2 and lets hope they don't go with QE3, debt ceiling being played with by governemnt, etc etc.

I actually believe we are in the throws of what will be the first down quarter of a new recession (Need two negative growth quarters to call a recession but remember you heard it first in 9 months when they realize we in a recession again).

But will it get bad as it did when Lehmen collapses? Depends on what metric you look at.

Currently I beleive the world is slowing which will actually lower inflation as we see Food and Gas prices fall. I suspect the Dollar will get stronger as the world becomes less interested in the Euro and Yen (which will bring down Gold and Silver I suspect).  As for the stock market we could easily see a fall of greater than 10%.

But what about Real Estate Prices?  I suspect we will have another year of negative news on the macro # but I beleive I see signs of "True Green Shoots"

I see that prices in the lower end of the market are flat or trending up as competition rises as people look for yield or a return on their money/savings. This is capitalism at it's finest.  Animal Spirits at work.

So what to do?  That is up to you but what I am doing. 

Over the next 90 days I suspect banks will be releasing more inventory and trying to raise Cash before the winter and the market really slows down. So I am going to be agressive and write a lot of offers and see a lot of properties and try and talk with more agents. I am also going to be more agressive on price and that means offering 5-10% less than I normally would as I want to catch the great deals and not just the good deals

Good Investing