Over the past few days, I have seen multiple articles and postings about market reports. The most recent one today talks about FHFA and the first increase in home prices in quite some time. What does this mean? Are we in a recovery? Well, we have to compare that report to all of the other reports that say we could be headed for more downturn, lower prices, and generally, dangerous times ahead.
So how do we invest, and filter all of these reports and conflicting information? How can we be effective, if every piece of information is just the opposite of something we may have read even that very day from another source?
The first thing we need to do, is understand who is giving their information, and if they may have any bias behind it. Keep in mind, every article or report may be skewed to favor an agenda. For example, going into an election cycle, could there be political pressure or motivation to present positive information about the economy? Just something to think about. Another thing to consider, is where is the information coming from? I read a news article where the reporter interviewed an agent about the real estate market for my area. The agent said glowing things and reported all positive numbers about the growth of the market. Could it be that the agent wanted to drum up business or make more people in the area want to buy houses? Of course. It doesn't necessarily mean the information is flawed, it just means we have to look at it critically. Make sure you use multiple sources and watch trends over time, so YOU have a grip on the market and what will be happening, instead of relying on news reports or government reports. My rule of thumb is to not trust ANYONE, but take in information and opinions from EVERYONE. Then I make my own decisions based on what I percieve reality to be.
So, how do we invest with all of this information? Very carefully, but, not so carefully that we don't invest. Keep in mind that real estate is cyclical. We have seen these cycles in different variations for hundreds of years. Savvy investors in all ages have made great money with real estate if they are paying attention, and incorporating the strategies tailored to that market cycle. Don't be fearful of any economy. Understand it, research it, and make money based on what the economy dictates. For example, if prices are dropping, and the economy is bad, (gross generalization) then maybe we focus on lower income housing, rentals, or mobile homes. There is always something that will work. It's YOUR job to figure out what that is.
Over the past few days, I have seen multiple articles and postings about market reports. The most recent one today talks about FHFA and the first increase in home prices in quite some time. What does this mean? Are we in a recovery? Well, we have to compare that report to all of the other reports that say we could be headed for more downturn, lower prices, and generally, dangerous times ahead.
So how do we invest, and filter all of these reports and conflicting information? How can we be effective, if every piece of information is just the opposite of something we may have read even that very day from another source?
The first thing we need to do, is understand who is giving their information, and if they may have any bias behind it. Keep in mind, every article or report may be skewed to favor an agenda. For example, going into an election cycle, could there be political pressure or motivation to present positive information about the economy? Just something to think about. Another thing to consider, is where is the information coming from? I read a news article where the reporter interviewed an agent about the real estate market for my area. The agent said glowing things and reported all positive numbers about the growth of the market. Could it be that the agent wanted to drum up business or make more people in the area want to buy houses? Of course. It doesn't necessarily mean the information is flawed, it just means we have to look at it critically. Make sure you use multiple sources and watch trends over time, so YOU have a grip on the market and what will be happening, instead of relying on news reports or government reports. My rule of thumb is to not trust ANYONE, but take in information and opinions from EVERYONE. Then I make my own decisions based on what I percieve reality to be.
So, how do we invest with all of this information? Very carefully, but, not so carefully that we don't invest. Keep in mind that real estate is cyclical. We have seen these cycles in different variations for hundreds of years. Savvy investors in all ages have made great money with real estate if they are paying attention, and incorporating the strategies tailored to that market cycle. Don't be fearful of any economy. Understand it, research it, and make money based on what the economy dictates. For example, if prices are dropping, and the economy is bad, (gross generalization) then maybe we focus on lower income housing, rentals, or mobile homes. There is always something that will work. It's YOUR job to figure out what that is.
Happy Hunting!!