It’s a Mind Market
October 20th, 2006 Categories: silver spring real estate
Here we go again. The news media is back and playing it’s old game of pummeling the airwaves with predictions of doom for the real estate industry. “The Big Crash is Coming”, “Disaster Ahead”, “Bubble About to Burst.” Blah, Blah, Blah. And it’s working. People are scared. You can’t go to a supermarket or a coffee shop without overhearing a conversation about how bad the market is. Whenever you hear a piece of information pounded at you from different sources, naturally it’s going to sink in.
True, the numbers have been falling. Nobody can deny that. But, the “end of the world” hype is just not supported by any evidence. Always remember, the news media LOVE predictions of disaster because it scares people into watching the news-even if it never happens. The problem is that the facts don’t support the wild claims. When the market crashes, there MUST be a catalyst for that crash. There isn’t one. There are only fluctuations. Today’s fluctuations may be swinging downward more than last year, but it’s by no means a crash. There has been no event – like the Stock Market Crash of 1929 or other disaster – large enough to cause a crash. Further, with 20 years of experience in this proffession, I’ll go on to say that we are in one of the best times in real estate history. The media would laugh at me, but they are not in the trenches every day with me and they don’t see what I see. What do I see? A Strong Economy …. This is a key factor in any analysis of the real estate market. The current economic viability of the United States ensures that no matter how wild the real estate fluctuations may be, there are still people who will always want homes. Job Growth …. Similarly, as long as new jobs are being created, there will always be a demand for housing. Companies open up new facilities and their employees who move there need places to live.
� Especially in our area where the Federal Government is a huge Employer. A Moving Population . . . . Americans move more than ever before. The average time people spend in a home has dropped dramatically over the past 30 years. They buy, sell, move again, buy summer homes, buy winter homes, buy investment property and buy homes for their parents or children. So, what’s all the hype about, right? How can I possibly make these apparently outlandish statements while the news media is saying the exact opposite? Well the market HAS cooled a little bit. The numbers have slightly declined, but they have declined in a market that was in the midst of the biggest boom in history. That fact must be taken into consideration for any accurate analysis. Remember the past 5-8 years have been spectacular – in fact, abnormally high. Numbers may be dropping a bit, but they’re dropping from to a level that is STILL above average. Let’s put things into a numbers’ perspective. If our market in 2005 had increased by 25%, then “cooled” 5% in 2006, then we’re still 20% up!. This is not a crash, this isn’t even “cooling”, but according to the media the real estate market as we know it is about to explode. I THINK NOT!!!
