Aug 19, 2011
It’s the end of the world! No, everything’s fine! The end is nigh! Never mind, it’s OK!
19 Aug 2011
Posted by Andrew Kantor
I’ve heard it said that we’re too negative sometimes — that we report too much bad news about the real estate market, and that doesn’t do anyone any good.
This was on my mind as I read NAR’s monthly housing stats for July, and it made me think about my days of watching the stock market. Once upon a time, when I was into investing, I used to watch my stocks like a hawk — they’d go up (happy!) and down (freaked!).
But I finally got my act together and read the right investing books. I was in it for the long haul; I stopped panicking about the daily ups and down. I put my money where I wanted it, and left it, period. Once a year or so I would check on it and make adjustments.
Stress level: much lower. When the market dropped, I knew my stocks were taking a hit, but so what? There were going to be up and downs, but the long-term trend was up.
I’m beginning to feel that it’s the same way with real estate reports. It’s very easy to see an up arrow and think “Yay!” only to see a down arrow the next month and panic.
It’s a quick road to Hypertension City.
For example, yesterday NAR reported that sales dropped 3.5% from June to July. (Oh no!) But the numbers also said that sales were up 21% from July 2010. (Oh yes!) But that was because July 2010 numbers were artificially low thanks to the expiration of the home buyer’s tax credit. (Oh, um… no?)
Instead of wringing our hands over the ups and downs, let’s keep some facts in mind:
- The market is pretty bad right now, but it’s going to get better.
- People will always need a place to live.
- Virginians are still having babies.
We’re going to continue to report the numbers, bad and good. Yeah, these days there’s a bunch of bad news, but it’s all short-term stuff.
But as long as people need a place to live, and Virginians keep having babies, the long-term picture is always good.