Where is your personal bottom?
Published: 10 July 2008 - Author: Marcus Burke“I’m not buying yet. I’m waiting on the sidelines for the market to hit rock bottom.”
You and the rest of the country.
I’m not saying you’re wrong. But I have two questions for you:
1.) How will you know when rock bottom happens in a complex market where the only perfect vision is hindsight, and the best statistics are at least 3 months old? Real estate isn’t tracked in a real time manner such as publicly traded stocks so it is only weeks or months after a deal has been negotiated and closed that the analysts can accurately gauge the market based on completed transactions. This lag time cleverly disguises the most opportune time to buy at the deepest discount and makes even seasoned investors skittish because the truth is that bottom will only become known after the low watermark has been reached and the leveling off process has already begun. (See this post for a real numbers analysis).
If it were really that easy work the market, we’d all be rich. But as many have discovered of late, profiting from real estate is not always easy. Purchasing real estate requires a certain amount of risk tolerance. Some folk prefer stocks, some prefer to stuff their money under the mattress with their porn. At the end of the day, each person has to assess when the time is right for them to personally get back in the house buying market. Those that take the most risks make the most money but also stand to lose the most, whereas those that choose a more conservative route are not likely to make as much money, but also bear less risk. If you play Black Jack are you the kind of guy who sticks at 17 – or do you take the risk and “twist”?
So where is your “personal bottom?” Mine is just below my back.
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[...] it is a great market if you’re a buyer – and those would-be buyers sitting on the sidelines trying to predict ”bottom” are likely to be sorely disappointed as the last few weeks has made one thing painfully clear: No [...]
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[...] not going to stick my neck out and tell you that bottom is here… your bottom is personal after all – but I will present some numbers – and let you decide for yourself. (Click on the table [...]
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[...] Increasing numbers of observers have said of late that we’ve already hit bottom, and I’m inclined to agree, with one caveat. Bottom will arrive at slightly different times for different states, and different cities within states and, different communities within cities. There is no uniform national bottom. When I hear the refrain, “I don’t think we’ve hit bottom yet” I just roll my eyes. And then, there is your personal bottom. [...]