Yup, there was some dismal news in the housing market today. Housing sales in July 2010 dropped 25.5 percent below July 2009 sales. That’s not so hot, especially when we’re trying to get into recovery mode. It’s the lowest volume of home sales in 15 years!
So with all this doom and gloom, time to avoid real estate, right? Time to panic and start unloading your investments? Head to the hills and bury yourself in that bunker your crazy uncle built back in 60’s during the nuclear weapons craze?
Sorry, it’s too late to panic now. Actually, about 5 years too late. Checkout this graph. It’s self-explanatory (you can click on it to make it larger).
A good time to panic. You just bought a $500,000 property in 2005, and things never looked better! There was 20 percent year-over-year appreciation for the previous several years. Heck, at this rate, you could double your investment in less than 5 years…without doing a single thing.
A good time to be sane. You’ve been sitting on the sidelines, watching property values decline. At the current rate, and with recent news, it seems like prices are just going to spiral down into an abysmal pit of despair…all without you doing a single thing. So be sane! Take advantage of the decline!
Could prices drop further? Absolutely. How much of a drop? That’s the thing, nobody knows by how much and when it will happen. Prices will not decline forever. This also, is an absolute.*
It’s just like other investment vehicles out there. For example, if you’re going to buy and sell stocks. You can never nail the top or the bottom. As long as you get close, consider yourself lucky. Otherwise, you’ll be on the sidelines watching others make the profitable moves.
*(My personal opinion: looking at market statistics, I believe we hit the market bottom sometime around March of 2009. So far, that number has been holding… Have a different opinion? let me know.)
