| There has been a lot of talk lately about the "Real | | | | across the United states, although slightly varied in |
| Estate Bubble", and a lot of folks are asking the | | | | degree. |
| question: "When it is going to burst"? | | | | In addition, the cycles tend to favor the ups rather than |
| They are saying that the market just can't sustain this | | | | the downs. It is not uncommon to see large cycles of |
| level of growth and appreciation much longer, and I | | | | appreciation and much smaller downward cycles. In |
| heat them say that it is inevitable that it must come | | | | other words, the current double-digit growth we've all |
| crashing down soon. People are worried. They don't | | | | come to know and love in recent years will likely be |
| think it can last; That whatever goes up, must come | | | | followed by downturns of single digit declines. Its like |
| down. | | | | taking two steps forward and one step back. |
| These folks have been conditioned to believe what | | | | In the big picture you will still be further ahead than |
| they believe most likely from the experience of the | | | | when you started. You may see slower growth, but it |
| stock market bubble of 2000, and maybe the 1990's | | | | will still be growth. |
| when the real estate market was hit hard in many | | | | Real Estate is a Basic Necessity |
| large metropolitan areas across the country. | | | | People need to live somewhere. They need a roof |
| Its human nature to feel this way. We all know the | | | | over their head and their children's heads. Like food |
| saying (or the 80's tune for you big hair folks), "Once | | | | and clothing we must have a home. People don't need |
| Bitten, Twice Shy". Or what about, "All good things | | | | stocks or bonds. Therefore, you can be sure that |
| must come to an end."? Its how we react to almost | | | | whether the market is high or low in growth, whether |
| everything that affects our well being and general | | | | interest rates are up or down, people will be buying, |
| safety. Its a subconscious reaction at the gut level. | | | | renting, leasing, and selling homes. It is as perennial as |
| Just like in the stock market, there are bulls and bears. | | | | the years. |
| Bulls are typically more optimistic about the market and | | | | This Real Estate Wave Has Been Around Awhile |
| expect it go up, and bears are generally more | | | | I don't know when you first realized we were in an up |
| pessimistic and expect the market to go down. They | | | | market in real estate, but it has been on a solid upward |
| will always be there to provide free advice and | | | | trend for at least the last 3-4 years. It didn't just |
| "expert consulting". Remember though, who you | | | | happen yesterday. Of course like anything else, |
| decide to listen to will certainly have an effect on your | | | | awareness of the general public is a bit latent, and |
| decision making, and ultimately your success. | | | | dependant upon the media. It has only been lately that |
| Well, I'm here to say that there is no real estate bubble! | | | | the media has really focused on it and thrust it onto |
| There never was a real estate bubble. Its a complete | | | | the front page. |
| and utter fallacy. | | | | The old adage "Success breeds success" is also true. |
| "How can I say that?" you ask. I can say that because | | | | The momentum will grow as other more traditional |
| the real estate market is in reality, a Wave. Its a cycle, | | | | investors continue to jump on the band wagon and |
| and we just happen to be riding the big swells, or the | | | | pour their money and resources into real estate |
| crest of this long, consistent, and fairly predictable | | | | investment. It tends to create a perpetual, self-feeding |
| pattern. | | | | market that is ideal for more seasoned investors. |
| There is no doubt that real estate has been a rock | | | | Real Estate is Local and Regional |
| solid investment for decades, and will continue to be | | | | It is true that even in today's real estate boom, there |
| for the foreseeable future and for many reasons that I | | | | are areas in the United States that are not enjoying |
| would like to demonstrate here and now. Because | | | | the high rates of return that others are experiencing. |
| you, as a real estate investor, must be able to move | | | | California is a fantastic place to invest, so is Arizona |
| forward with confidence when deciding which projects | | | | and a host of other places.But the Rust Belt states are |
| and properties you want to buy and sell. That is the | | | | not as fortunate. Watch what happens to Florida |
| purpose of my website, to provide you timely | | | | home values after this horrendous hurricane season. |
| information, strategies and techniques to help you | | | | This is because real estate is driven by the primary |
| succeed. | | | | capitalistic force of Supply and Demand. |
| But first, what is a bubble? In terms of economics and | | | | Generally speaking, property values increase in areas |
| markets, the best definition is probably something along | | | | where the job market is strong, and where there are |
| the lines of "an isolated or ephemeral situation or | | | | more people moving into than away from. Of course |
| condition with little support or substantiation from | | | | there are other factors to consider; including interest |
| external conditions". | | | | rates, availability of funding, climate, and governmental |
| The best example, and the one foremost in the minds | | | | policies. These are all important and you must be |
| of us all, is the stock market tech bubble of 1999 and | | | | cognizant of their impacts to your strategy. |
| 2000. We all rushed into the tech stocks and the stock | | | | However, it is true no that matter what the rates are |
| market in general as we saw the .com millionaires | | | | or how nice the climate is, people will continue to |
| being made. | | | | migrate where there are abundant job markets and |
| Y2K was a big factor in the tech bubble. People were | | | | affordable housing. If you can stay just slightly ahead |
| buying new systems at a unprecedented rate in order | | | | of that migration, you will profit immensely. |
| to prepare for doomsday. People were also buying | | | | Real Estate Investing is Diverse |
| consumable goods to stock up for the dreadful event | | | | You can invest in so many different ways, from |
| that never came. | | | | foreclosures and fix and flips, to buy and hold and |
| So what was holding up, or supporting the "irrational | | | | everything in between. Right now the commercial |
| exuberance" as Alan Greenspan characterized it? | | | | space is relatively soft. It will recover no doubt, but |
| Well, we learned soon afterward, not much. It was an | | | | people investing in single family homes are probably |
| isolated, temporary incident that had little support from | | | | doing slightly better in returns. Vacancies are up and |
| the other conditions. It was indeed like a bubble that | | | | rents are down for commercial properties, but |
| burst. | | | | fortunately, the forecast is for this sector to improve |
| And it has had little support since then. Historically | | | | over the next few years. |
| speaking, after the stock market crash of 1929 and | | | | The key to successful real estate investing is to |
| 1987, it took decades for the market to recover, | | | | understand the forces, trends, and conditions that are |
| although it did eventually recover. Just look at the Dow | | | | driving the market. BE AWARE of your surroundings; |
| average and the S&P average for the last hundred | | | | Read articles and stay on top of industry news; Look |
| years and see the pattern of recovery. You can be | | | | in your own area at the job market and forecasts. |
| sure that a slow steady rise for stocks is in progress. | | | | Check my website for all the news and information |
| Now back to real estate. Let me explain why this is | | | | you need to help you succeed in your real estate |
| not a bubble. | | | | investing career. |
| Real Estate is Cyclic | | | | There is no real estate bubble, but there is a real |
| Real estate has had its ups and downs over the | | | | estate wave. Like any dedicated surfer, when the |
| years, but it is generally stable, with no drastic swings | | | | surf's up, get in the water and catch a wave! But |
| per se. If you were to look at the cycles on a chart | | | | watch for danger, be flexible, and be smart. Invest |
| you would see a clear pattern of gently rolling swells. | | | | wisely and you can prosper in any real estate market. |
| This pattern is consistent across cities and regions all | | | | |