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The Truth About the Real Estate Market

September 19, 2008

Lately I’ve been asked alot about “When do think the real estate market will bottom out?”

It happened yesterday when I got my hair cut.  The stylist, Margie at Cost Cutters on University Avenue asked me that question when she found out I was a REALTOR.  It happened last night at a REALTOR function out in Oregon.  In fact, I can recall at least 5 conversations this week with folks asking this same question.

When will this happen?  I don’t know.  If I did I would be “timing” the market to the extent that I could amass as much real estate at that very moment, then sell it as the market climbs back up and retire (relatively) young and wealthy.

The truth is none of us know when the market will tick back up.  And if we’re waiting for that to happen, the only way we’ll know it has is when it does–thus loosing the opportunity to buy property at the bottom.  What I do know is there are some great indicators that this might be a great time to buy.

My standard response when someone asks about “timing” the market is that one can’t do this.  You see, real estate has historically been a buy and hold game.  Sometime in the early 2000’s it became a buy and immediately sell for a huge profit game.  This skewed the mindset of many would be property buyers.

There’s no denying this is a buyer’s market.  The number of properties for sale does exceed the number of buyers in the market-thus opportunity is there today.  With interest rates staying very low (long term rates hovering around 6.0%) and selection being the hightest I’ve ever seen (20 years in this business) now might be the time.

Consider the following chart:

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