Ed's Blog

It's amazing how history repeats itself and what kinds of opportunities this cyclical nature presents. Take real estate for instance. I moved to California in 1980. Real estate had just finished a big run-up in values during the late 1970s, but was cooling off. There were record high interest rates and a national and local recession. Foreclosures were high. People were saying don't buy real estate because it's too high and will never go up again. Unbowed by the nay-sayers, my wife and I went ahead and bought a house anyway. It was one of the best decisions we ever made. Median home prices in California at that time were just breaking the $100,000 “barrier”. Think about that as you read on.

Real estate prices started climbing by the mid to late 1980s. People who had bought in the early 1980s enjoyed huge rewards. Prices went crazy just like in the late 1970s. And sure enough, just like the winter follows the spring, summer and autumn, real estate prices started to moderate and drop. Foreclosures reached all-time highs. The economy moved into a recession. Lenders tightened up on lending standards and people said don't buy real estate because it was priced too high and would never go up again. Something interesting happened. Many savvy investors started buying real estate. Just like the spring follows the winter, real estate prices started to climb again. Investors who bought in the early 1990s reaped huge equities in their properties. Many of them have been able to retire from the fortunes they made from those purchases.

Here we are in 2007. We have recently finished one of the great bull runs in real estate. Prices are moderating and dropping. Lenders have tightened the reins. Foreclosures have climbed to record levels. People are saying don't buy real estate because it will never recover again. By now, this must be sounding familiar to you.

So what to do now? It's my opinion that it's a great time to buy and hold for what I believe will be the inevitable significant appreciation. Why do I believe this? Because I've seen it happen twice before (and I've read about it happening at other times in our history). Is it guaranteed that now’s the time to buy to make great gains in equity? No! There are no guarantees in life! However, there are often great opportunities for those who are prepared and who are willing to take action.

If you'd like to take advantage of some great buying and investing opportunities, give us a call and we'll show you some terrific possibilities.