Publisher Brad Inman wrote, “When all the experts unanimously agree, I get nervous.” “I will never forget the neglected group of experts who pumped up the housing market in 2008.”
For 10 years or more, I’ve been buying assets and often stating, “I’ll never sell them.”
But as the saying goes, never say never. I’ve sold some assets in the last six months and just signed standby agreements with two great real estate agents for the sale of two California homes.
My thinking – I think many homeowners would agree – it’s a good time to get some real estate chips off the table.
Do you think a property crash is on the horizon? number.
But rising rates, among other trends, are making me nervous. (Full disclosure: One of the worst investment decisions I ever made was selling a California home in 2010.)
Nothing has helped the housing market more than very low interest rates. And now the rates are going up.
The 30-year fixed-rate loan is about 3.22 percent, up from 3.11 percent last week, according to Freddie Mac. A year ago, mortgage rates were at a record low of 2.65 percent.
Additional price increases won’t dampen demand for homes, but they do raise messy questions, especially in an overly bloated market.
Low rates were the only way for many consumers to rationalize or economize on exorbitant prices.
If prices keep going up, something has to be offered and that might be housing prices.
It could also unleash some reluctant selling landlords to get cash in their home equity. Nobody can tell the time of the market, but you can make a logical decision at the present value of owning or selling an asset.
Will I buy something else? Not now, but I might step in if stock goes up and prices go down.
I love real estate so much
Experts like to point to rising incomes, lower rates, and millennial demographic inflation as the mainstays of a strong market in the coming year.
In addition, home purchases by investors drove up prices, adding to the dynamic market.
But investors – Wall Street really in this case – are friends in fair weather for residential real estate and can be gone in a jiffy.
And while the demographic argument is valid, it can be undermined by changing short-term consumer sentiment and household business-economic behaviour.
Higher rates can undermine the big picture of dizziness. Booming inflation will undermine the benefits of wage growth.
Finally, these times have taught us some lessons about predictions, predictions, and experts.
Take, for example, high inflation. Yes, it all seems explainable in hindsight. But the truth is that it infiltrated the smartest people in the world, making them look rather stupid. And we all pay the price.
When all the experts unanimously agree — I call it the abundance of stylish pants — it makes me nervous. I will never forget the reckless group of experts who pumped up the housing market in 2008.
Twenty-five years ago, my older brother attended a workshop at Harvard University where a distinguished professor brushed off the prospects for Apple’s recovery. The distressed company was on its back, and its stock was a penny at the time, which has accounted for the splits ever since.
Shortly after the Harvard lecture, my brother bought shares in Apple.
He said: “The certainty with which [the Harvard luminary] His terrible expectation was too much, so I went the other way.”
Email Brad Inman