Due to the instability of the stock market and rising real estate prices, people have been asking me about the real estate market even more than usual lately. Yet, there is a trend in almost every conversation…and that is the person agrees the real estate market will correct, but it won’t happen here. Where, exactly, is here? “Here” is wherever they live or have invested. When I talk to my friends in Arizona, it won’t happen there because people from California are moving there in droves. When I talk to my California friends, they say it won’t happen there because the weather will always attract people. In Idaho, they’re confident it won’t happen there because people from Washington are moving in. When I talk to my girlfriend’s family in Ohio, it won’t happen there because… now that I think about it, they haven’t given me a reason. They just know that the real estate bubble won’t pop anywhere near them.
If you find yourself saying or thinking, “it won’t happen here,” I need to give you a reality check. Denial is not an investment tool. In fact, you can’t be a successful investor if you don’t understand market cycles. When a correction occurs, it generally happens everywhere in the country. Of course, some areas are affected more than others, but every city and every state is eventually affected.
If you’re an educated investor and understand market cycles, then you will understand where we are at right now, and you’ll also understand that geography does not make you immune to economic trends.
Talk to you soon,