November 25, 2005

There will be great opportunities to buy houses at discounts during the down phase of the cycle. Be patient

A wise article, and a word of advice - patience. I like that. Things work in cycles. I think we all see where we are in this current housing cycle. The tippy tippy top - and just turned down the hill.

So that doesn't mean buy a house at a 10% discount - and get a "good deal". It means be patient. Really patient.

Remember whent the NASDAQ fell 10%? Didn't you just salivate, and buy more QQQ's? Then 20%. Then 30%. Then 40%. Then 50%. Then 60%. Then oh my god 70%! Then you paniced and sold! Right at the time it bottomed out and you should've been buying!

So.. Learn from that cycle, that bubble, that bust.

Horde cash. Don't buy housing. Stay out. Wait for a plateau. Heck, wait for houses to start going up agagin - say 6 months. No need to catch the very bottom. Most important, wait for rents to generate postive cash flow.

Your patience will be rewarded. Buy everything in site at that point. And retire on your cash flow and increasing asset base. Enjoy

"Surreal estate." I wish I were the originator of this phrase. I am merely an appropriator. It is the title of a column in the November 20th Sunday supplement on real estate in the San Francisco Chronicle, written by Carol Lloyd.

I have returned from the edge of the San Andreas fault. What I saw was not comforting.

You may think that you are immune. You are not. What you are about to read will affect you. Why? Because of the banking system. I learned something from a banker at a conference I attended that has forced me to reconsider my own plans.

Since 1996, bankers have built the banking system along an economic San Andreas fault.


Tom said...

Check out this link:

skytrekker said...

The Fire Sales wil begin in the spring- yet buyer beware, if you think the mini price reductions are giving you A 'good buy' in bubble regions, think twice. You are catching a falling knife. I did that here in Connecticut in 1989.

41cadillac said...

tom: Read the link.

Below is the truth stated by Zandi.

He said: "Housing is going to go from being a key contributor to the job engine to being a significant drag on job growth."

Also those 30,000 job cuts by GM are significant. I understand that attrition will be a part of the plan at GM. Nevertheless job cuts they are.

What are those newcomer real estate agents going to do for employment? (Rhetorical question only).

000000000000000000000000000000000000 said...


Me too. Last time I lost on three houses before the bottom. Then no jobs or money. Boo Hoo.

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