It’s been a long time since we’ve visited Realty Times. A website that caters to realtors, it can always be counted on to look on the bright side, even when there isn’t one.
Today they have an article by PJ Wade, a Canadian financial commentator. As more and more people are hesitant to purchase a home in the current economic environment, Wade offers this advice:
Waiting for things to go back to the way they were, and other “caught in the headlights” reactions, waste time and use up valuable resources. These “victim” strategies can make financial matters worse, as you lose more ground than you can gain back in good times. Are you prepared for the possibility that when prosperity returns—and it will—it may not look anything like the “more is more” pre-recession world?
I’ll agree with Wade in this- waiting for “things to go back to the way they were” might mean a wait longer than most of us can expect to live. The housing boom of a few years ago has left such economic damage in its wake, with luck, central bankers will one day look back at these times with horror. The bubble has sailed. Don’t look for its return any time soon.
That said, I’ve been a little puzzled by this advice:
Real estate is the investment you can live in. This double opportunity can be used to weather economic storms and achieve financial goals if you don’t let short-term thinking overshadow long-term gain. Look beyond immediate solutions, and consider possible long-range positive and negative effects of today’s choices to avoid the double dip. “Act in haste, repent in leisure” is not an effective real estate strategy.
How many people have become unemployed and found their home not to be a “port in a storm”, but a “ball and chain”? In some ways, the flexibility of a rental has it’s advantages for those whose employment is uncertain, it allows them the flexibility to more easily move and/or downsize if need be. There’s also that “long term’ thing. If housing is in the doldrums for the next few years, (Which even Lawrence Yun, chief cheerleader for the NAR admits.) why is it a better strategy to purchase now, when depreciation is a near certainty and appreciation years away?
I thought the term “victim strategy” an interesting one. It does evoke a picture of those strange investors who will jump into a stock when the prices are high, them dump them when the prices are low. Are you being a victim however, if you dump that stock at the bottom because you see better opportunities elsewhere? Aren’t the real victims the ones who don’t “know when to fold ‘em”?
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Ian sent us this one to Doom from UBC Comp Sci a couple of years ago, but maybe Admin will get a chuckle again. You’ll get the point hopefully …
Twist, are you still a holdout renter? Chuck Ponzi just capitulated.
Linkies are broken.
Chuck -
I don’t immediately see the problem (but Admin could have been fixing something)
W.C.-
I gotta admit, I never thought I’d be renting this long. The air hasn’t really come out of the bubble here in Austin though, it’s a bit behind the curve. It is way too early to be buying here.
Well I think Austin is slowly getting there. We bought in 2006 we are pretty much at the purchase price or some what less right now. So if we have to sell we are looking at some loss. But at the same time we bought knowing that there was a highly probability we would loose money if we had to sell in a hurry. At least for now our mortgage and other costs are still lower than renting a similar or much older house in the same neighborhood.
Hey Twist you really in Austin,TX
Simi-
Out in the Lake Travis area, actually.