The media reports of late are all “doom and gloom” focusing on foreclosure numbers, price declines, and inventory levels. One might start believing real estate as an investment class is a bad pick and could stay that way for a long time.
Don’t believe it for a second…but before I make my case, let’s start with a Warren Buffet quote,
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Everyone is “fearful” of real estate investing right now. Buffet is saying, “Now’s the time to get greedy…and buy.” So the more reports the media prints about the “worst real estate market since the Great Depression” the better it is for real estate investors.
The time to be afraid was back when every idiot with a Charlton Sheets DVD under his arm could get a a stated income loan to buy his first investment home with nothing down. Without fear and overflowing with greed, they plunged into the real estate investment world driving up prices due to the irrational belief the real estate market was bullet-proof.
Today even with the negative media reports, one can find data to support a return to real estate as an investment:
The foreclosure crisis has been contained now to about 4 states, California, Nevada, Arizona and Florida. We couldn’t say that a year ago. The Case-Shiller housing price index is showing month over month price growth in about half of the 20 cities it covers. The rental prices in most cities (the underlying real value of a real estate investment) is climbing. Inflation in our future is about the only thing economists can agree on right now and we all know what happens to rents and home value during an inflationary economy.
So, get out there and buy…get greedy while everyone else sits in the corner scared to death.
You’d better hurry or I’ll beat you to it!