Re: How do you know this? - Posted by GL - ON
Posted by GL - ON on July 22, 2003 at 15:07:52:
“I’m curious since we have not seen times like this before
what makes people certain they will leave rei???”
But we have seen times like this before, at least once every 20 years.
The last big boom was in the late 80’s. The 90’s were the best time to buy real estate I ever saw in my life. Now the general public is starting to get wise, and the prices are getting bid up to new highs.
We are just getting near the blowoff stage (last 2 or 3 years of the boom) in some markets. I hear Atlanta, which was a leader in the boom, has already started to slide.
Where I am the boom is just beginning and has another 5 years to run.
It’s easy to time the market if you know what “time” it is. You don’t even need a stopwatch, a calendar will do.
Here is how it works. We are looking at real estate as an investment. You can tell a good investment from a bad investment because a good investment makes money, a bad one loses money.
If you know what you are doing you can analyse any investment and tell whether it is a good one or a bad one.
When there are lots of great investments in the market, that’s the time to buy. It is also the time everyone stays away and all your broke neighbors call you a fool.
When there are no good investments left in the market and all your broke neighbors are getting into the game and telling you to get in before it’s too late, it’s getting to the blowoff stage.
When you have been expecting the boom to crash, it seems, for years and prices have kept going up to ridiculous levels, and everyone is saying it is a whole new paradigm and the old rules don’t apply anymore and the boom is never going to end, then you know the end is only months away.
Remember, the pendulum always swings too far one way, and when you think it is never going to stop, it suddenly swings the other way.