All too often we get caught up buying when everyone else is buying and selling when everyone else is selling. Every once-in-a-while we get lucky and do the opposite.
Why does it seem that people like Warren Buffet and Donald Trump always do it right? It’s because they are contrarians. What’s a contrarian? Someone who sells when everyone else is buying and buys when everyone else is selling (in a nutshell).
So here’s the thing… We are at the bottom of the market. Do you know how I know this? Because there are signs - obvious signs and little known signs. A good investor doesn’t wait until everything points up. A good investor doesn’t wait until the media says it’s good. A good investor watches the signs and follows the direction the signs lead.
One of my goals on this blog is to help you know and see the signs in the North Idaho Real Estate market. I see them every day. The last 2 years we’ve been at a standstill - prices have held pretty steady with minimal loss of value. Inventory has sky rocketed, but we have to take that with a grain of salt (inventory is naturally going to be higher since our population base is higher and the number of housing units that are now existing are higher - I’ll get to a post on this whole issue in a few weeks).
Here’s a sign: Every once in a while, the media allows something to come through - although they will seriously down play it just to make sure we all know they are the investment guru’s.
What’s the sign? “Surprise” rebound in housing.
Construction of new homes increased by the biggest percentage in more than two years in April…
The Commerce Department reported Friday that housing construction rose by 8.2 percent in April to a seasonally adjusted annual rate of 1.03 million units. While apartment construction rose by 36 percent, building in the much larger single-family sector of the market fell by 1.7 percent
Applications for building permits, considered a good sign of future activity, recorded an increase in April, rising by 4.9 percent to 978,000 units.
The housing report showed that construction activity was up in most regions of the country in April, rising by 24.4 percent in the Midwest, 18.5 percent in the West and 3.6 percent in the South.
Is it a surprise or was it expected? It was expected by some - with so many foreclosures, people must have a place to live. The rebound was seriously strengthed by growth in the multi-family market. Multi-family building trends tend to following single-family home trends by anywhere from 18-24 months. Hum… let’s think about that. About how many months has it been since the peak? Anywhere from 18-30 months, depending upon your local market. Looks like real estate is sticking to it’s historical cycle.
Article here.
Posted under For Buyers, For Investors, General Real Estate
