Up Markets and Down Markets, When to Buy and Sell. (Part 2)
This is part 2 of a series where I explore some of the views/assumptions commonly held by people regarding how real estate markets work and what they mean to people who are buying themselves a home. The following is intended to be read in the context of the rest of the series so I recommend reading the other posts so this one makes more sense. The first of the series can be found here.
“But, the newspapers are constantly reporting doom and gloom.”
Yes, they are, but so what? They make such reports regularly regardless of what the market is doing. If markets are going up, it’s a crisis because we won’t be able to afford anything but at the same time “the bubble is about to burst” and when markets are slow or going down they are saying it’s going to get much much worse. I’ve heard all kinds of pundits over the years aruge about whether things will continue or have a dramatic change. Often there is one who has a business of selling real estate in some way who insists it will go up and there is someone else who is trying to get themselves published and read more who is all doom and gloom. Either of those strong opinions make great soundbites and create a sense of some kind of “debate”. The people who don’t get quoted so much are the ones who know full well that no one knows the future, the best they can do is give you an educated guess. And they are educated and try to share insights about what will likely happen based on data and knowledge… but it’s too loooooooooooooong and boooooooooring so these things don’t really get explored and they go to commerical. Besides “probably this” and “maybe that” aren’t easy take away point for people to remember, they don’t have the sizzle of drama that sell and don’t sound like the person knows what they’re talking about unless you are the kind of person who takes Dunning Kruger effect seriously.
In my eyes the media’s job is to sell advertising space wrapped in information that people want to see and hear. To do that, they have to do whatever they can to keep you glued to the TV set, website or buying the daily rag. They sensationalize and twist things to make them more interesting and often, scary. Bad news sells. It’s hard to forget about news that scares you isn’t it? You want to read more right?
I don’t know about you, but I have been involved in or had an inside view of many events that have wound up being talked about in the mainstream media. Every time I read about or saw it on TV I have found the event to be greatly dramatized and/or distorted to the point that I sometimes wonder if they’re talking about the same thing I experienced. Again, don’t take my word for what I saw about markets, do your own research and you’ll find that what I say here is provable.
The part that I find sad in all of this is how the mainstream media is in a position to have self fulfilling prophecies in terms of things economic. The public hears that things are good or bad and they either continue spending their money or start hoarding it. That’s a lot power.