Do You Buy Real Estate When Prices Are Down?

Does the average American buy real estate when prices are down? 

“Let’s ask ourselves another question. Isn’t real estate like any other commodity? You want to buy low and sell high. Much like crude oil prices, or corn or gold, supply and demand has a lot to do with prices going up or down. And like stocks or mutual funds, aren’t you speculating (gambling) that you can sell your house for more than what you paid? 

Then you figure in Sir Isaac Newton’s theory of real estate gravity. You learned it in grade school. ‘What goes up, must come down’. In the grand scheme the obvious answer is yes, buy real estate when prices are down. But, that is just what millions of Americans DIDN’T do and AREN’T doing. They bought when prices were UP! All of them were just sure prices were always going up.  Who did that benefit? ONLY the sellers.

There is a reason for that: buyers emotions. Simple. With millions facing or having been foreclosed on, their buying a house doesn’t seem like it was based on a very sound investment plan. No more difficult than that. They didn’t buy like an investor would. My Dad, rest his soul, would have told them all ‘You better buy that house like you’ll have to sell it tomorrow’. As a builders child, our house was for sale everyday of my life. I have moved 59 times in 52 years. I look at a house with one thing in mind. Can I make any money off of it? Not ’This is our dream home’; Or, I love this one…’I hate to move’ or ‘It costs too much to move’. Really? If you can make $25,000 to $50,000 or more by moving, how much does moving cost?

This is a problem with the typical American consumer. We buy based on emotions and convenience, instead of what we ‘perceive’ as the more difficult choice of budgeting and planning…”