Market conditions have changed. The changes are affecting almost all areas and markets.
So, if you don’t change, you won’t last. In August 2007, the median sales price for existing U.S. homes slipped to $225,000, down from its record high a year earlier of $229,000. The 1.7 percent dip marked the first year-over-year drop in more than a decade, according to the National Association of Realtors. To many pundits, that was irrefutable evidence that the nationwide housing slump is here to stay.
The up-and-up market of the last few years made many investors look like geniuses. However, it's not going to be business as usual going forward for many investors, and all indicators are that we will be in this situation for several years. Depending on who you listen to, the turnaround time is estimated to be two years on the low side and as much as 10 years on the high side.
Now for the glass-is-half-full perspective!
First, unlike the destruction wrought by the dot com tech bust of several years ago, the housing downturn won't take a huge bite out of the value of American residential real estate assets, currently estimated at more than $20 trillion.
"Housing cycles end with a whimper, not a bang," says Professor Joseph Gyourko, the Wharton School's Director of Real Estate Research, who did a new study which shows investors where to make safe real estate bets during a dangerous market.
Second, down markets in housing have always offered investors just as many angles to play as they might find during a boom - you just have to know where to look!
To stay in business and to prosper in the long run, it will be necessary for you to make some changes.
I once came across a definition of money stating that, “Money is a reward for solving problems and providing solutions.” At the end of the day, we all want to make money and do whatever we desire with that money. Real estate is just another vehicle. However, I happen to believe that it is the best vehicle out there to create financial independence (in good times or bad).
If you want to make money in real estate, find solutions to the biggest problems. With the changes in the real estate market, people don’t know where to turn. So if you can be the person they turn to for solutions, then you won’t have to worry about money.
Fact: more millionaires are made during times of upheaval than “normal” periods! This is when wealth shifts from one hand to another. One group of investors will perceive that the sky is falling while others will profit monumentally from the same events. Which group do you want to belong to? Will money come into your hand, or will it flow out?
Be sure to check back next month, as we'll cover the next part of this article —
"Maintaining Cash Flow During These Rough Times"