Chicken Little Is Crying Again

By your real estate dude

Today's San Diego Union article by Dean Calbreath is another example of doom and gloom. Check out the lead to this story:

"The California real estate market will remain sluggish through at least 2008 and spark widespread layoffs among construction and financial firms, according to the latest UCLA Anderson Forecast."

This article says nothing more than what everyone knows already. What amazes me is that it took all the brainiacs at UCLA to state the obvious. The simple facts are:

• Markets go up and markets go down.
• When markets go up lots of people make money and when markets go down lots of people have to find other ways to make money.

The fact that a slow down in real estate sales may cause a slow down in building of new properties is obvious to the most casual of observers and doesn't require a university study. The question is not if things are slowing down or if jobs will be lost, but what do we do about it?

In general in a buyer's market if you own property and do not have to sell for financial or other reasons, hold. This is particularly true if you are living in the property or if its income property that is generating positive cash flow. If you have to sell the property, price it aggressively so it will sell. There’s nothing more painful that sitting in your house waiting for buyers who never come.

If you are thinking of buying a home remember that it's called a buyer's market for a reason. The buyer's hold all the cards. Remember the keys to investing are time and timing. If you're a buyer, the timing may be right. The question is how long you will be holding the property (time). Historically, southern California property appreciates over time in almost any market. If you are planning on holding the property for enough time buying may be a no-brainer.

If you got into the real estate, mortgage or building profession during the boom you may have to make some changes in the way you do business in order to survive. You may need to explore new approaches to your business marketing and structure. For some it will simply amount to stepping out of the business during the slow down and moving back in when it’s booming again. This has been going on for at least 50 years that I know of.

So, don't let Chicken Little freak you out. The sky is not falling. The real estate market is not bad. It's just different and it requires that we approach it from a different point of view.