Emotional Market or Not?

Remember back in September 2007, I wrote about the emotional aspect of what was happening in the real estate investing scene. (Well, of course you don’t, but I looked at past blog articles and found I’d written, “Too many invested right past the “line of safety.”) The “bungee” cord was “frayed” when they jumped off the bridge! It cost them dearly.”

Well now, very few are moving anywhere fast… not even cautious to slow… some are “fastened into their seat” like a 10 year old on a Disney ride. There’s a new emotion invading the real estate investing landscape… it’s fear. Like when you get thrown from a horse when you’re young and you think, “I’m not getting on that horse again!” Well, hold up a minute cowboy… you won’t learn how to be a real cowboy, unless you get on that horse and ride again… someday soon.

I’ve talked with many real estate investors and other people in real estate and they are saying, that there is activity and the pricing market value will not be finished bottoming out for about another 6 months, but most have already reached the bottom price now.

Keep in mind, this information is coming to you from the WORST place in America for foreclosures. (It’s the first time I’ve ever known of, where being #1 was nothing to be proud of.) I live in a house that appraised for $275, 000.00, just two short years ago. Today, if I could even find a buyer, I would be doing well to get $110,000! (I got that straight from one of the best Realtors I know.) And with the current assessments of the new city water, sewer and irrigation in place… I’M ACTUALLY UPSIDE DOWN!! That’s right, $23,700 is the new COST, in addition to my mortgage balance. I don’t know who’s crunching the numbers or what they’re smoking, but to me, the 45% loss of value most ascribe to homes in my area is about as “accurate as a Donald Trump bad hair day.” According to my calculator, that’s a whopping 150% loss of market value. There are stocks that have never lost that much!

Very sadly, my neighbor (who we love) just finished loading up his family, dogs, birds and household possessions and moved into a rental about 15 minutes from the house he’d paid on for over five years, because the loan AND assessments, just pushed him over the edge!

He has been a hard working man (deputy sheriff) and his wife a dedicated school teacher, who now have a foreclosure staring them down the throat and losing everything they worked for. The foreclosure rate is “staggering” and the greed of banks and people alike has come back to create “heartache no one could have imagined.”

OK, I’m not saying real estate is a bad or risky investing tool, I’m just looking at the depth to which we’ve sunk. When will it get better? I’ll tell you now.

The day we realize that we have to start putting some emotion back into the ‘business of real estate investing” and start caring about people enough to say, NO. “It wouldn’t be good for you to borrow $300,000.00 since you work at Mickey D’s and bring home $320.00 a week and your husband brings home $390.00 a week at his job.” “I can’t, with a clear conscience, loan you this money.” Let’s replace GREED, with an emotion I call, CARING!

And, real estate investors, let’s get going again, because there are still a lot of opportunities!

Where did all the “American Idol” Real Estate Investors Go?

Yes, I’m watching American Idol! And it reminded me of all the real estate investors in the” big competition,” to be the biggest and richest. Well, many didn’t make the final 12 after the final cut of the downturn. So many “investors” got too “comfy” with their success and went “greed dead.” That’s like “brain dead” almost. (No more, do the numbers makes sense?) I spoke to an investor a couple weeks ago and he told me, he just let “foreclosure” takes it’s course. What else can you do when you’re in the “deep end” and can’t swim?

Well, it’s been a long time since I posted anything on the blog and WOW, has the real estate landscape changed. (Was that an understatement or what?)

But, the world has not spun out of orbit yet and there are signs… not “landmarks,” but small and encouraging “signs,” that things are beginning to look up a little bit.

My sources here in the land of the “real estate investor corpses” tell me that two things are happening: First, prices for property seems to have stabilized somewhat and Second, there are sales and closings going on.

That’s right. Sales are happening for the real estate associates that didn’t find work in a mall or somewhere else when the bottom dropped out. The general public hasn’t heard about it yet because until the “snowball” has grown large enough, no one will really take notice. The media is not as “cutting edge” on news as you think. And besides, they aren’t going to be quick on the uptake when it finally does really start to snowball. If you wait till everyone else finds out, your real opportunities won’t be as huge as they could have been.

Yes, we have an election this year and the economy is fighting the effects of high gas prices and yada yada, but don’t wait till everyone has heard the better reports on the 6:00 news. Talk to the people in the know. Your local real estate folks really have their hand on the pulse of what’s going on. Check with them to get an idea of what things are looking like, if you don’t already.

Because just like American Idol, 4 contestants will be cut tomorrow night.