Stop whining and get back in the game.

Even if you only focus on the residential single family detached market place, which is only a relatively small portion of the entire real estate market, you can see that things aren’t as bad as the media wants you to think they are. While people are complaining that the value of their homes has dropped 10, 20, even 30%, they seem to forget that much of the stock market dropped as much as 65%! They also seem to focus on exaggerated “values” that were based on over-appraisal and easy lending. I tire of hearing people complain that their “wealth” has deteriorated because of the drop of home prices when they actually invested extremely little or nothing in down payments in the first place or refinanced for 125% of inflated values thereby taking their investments and often profits out of the property. I know it must be uncomfortable, and I’m sorry, but if you don’t do the math then you won’t know the answer. You bought the ticket now take the ride.

When many parts of the country have seen double digit home appreciation (10% or higher) consistently for 6, 7 or 8 years, to have lost just a couple year’s of that growth in this “downturn” still leaves a huge growth overall. So for those who bought wisely and didn’t let their greed bottle up their brains, things are still fine. The single family segment of the real estate market, when combined with the pressure to lend higher and higher amounts and the appraisal pushing that was necessary for the sales to continue has all done a huge disservice to the home buying public. It has forced them to pay too much, assume too much risk and use too much of their available income to achieve and maintain home ownership. You should find it interesting that it seemed that nobody ever said “Hey, incomes aren’t keeping pace with house payments, savings are down, and home prices can only be justified by projecting continual significant growth despite numerous other economic factors that would justify an opposite opinion.” As a people we turned a blind eye to the realities of a market and instead payed homage to greed and misinformation. We built an economic house of cards that had to fall. You may say that this is easy for you to say now after the fact. In which case I challenge you to review my work over the last decade. I’ve been warning my clients for years about this irrational economy. And NO, I am not smarter than everybody else. It is in fact quite the opposite. I recognize that I am not the sharpest tool in the shed and so I have found it necessary to really do my homework and make my decisions based entirely on sound financial principles, practices and real economic facts and not what somebody else wanted me to do or buy.

Let me give you the same advise a great mentor gave me when I was young in the business:
1. Do your homework!
2. Understand the investment.
3. If it won’t pay for itself, don’t buy it.
4. Quit worrying about the numbers and worry about the relationships between the numbers.

It all seems so simple, and surprisingly it is. The truth about any subject is always simple and uncomplicated. While the media cries unemployment is at 8%, remember that employment is then 92%. When the media says values are down from last year, remember they are up from three years ago. When the media quotes the devastating loss of wealth due to the stock market drop, remember that Bill Gates is still the richest man on earth despite the loss of $18,000,000,000.00 and that relative to overall world wealth, most people still control about the save percentage as they did before the crash, it’s now just a smaller number. And the most important thing to remember is that you can build from here and do it in such a way that the bumps and bruises of future economic life will only be a minor inconvenience.

Real estate is a wonderful tool for the building financial security. It is the basis for all wealth. It has served me well as it has thousands and thousands of others. It will serve you well if you make it your servant, and not allow it to be your master. Make good decisions now, and tomorrow the world will willingly give up the financial security and benefits that today it only promises.