This is a VERY important concept to “Get” . . . and I see it happening in our local market as investors are starting to run out of “steals” in many areas . . . There’s plenty of development that could be happening, but I think a lot of the investors are still jumpy (or greedy) – and banks aren’t lending . . . This will actually have a slowing effect of the market appreciation (which isn’t necessarily a horrible thing) . . . Here’s what I think: The ones who go ahead and jump will win BIG.
This is a real-time lesson in “Timing the Market” . . . When that pendulum swings, and the Buyers are watching VERY carefully in order to pull the trigger (purchase) at that EXACT moment when it’s at the bottom, they will miss every time because by the time news of hitting the bottom breaks . . . the up-swing will already be under way . . . and the “Smart-Money Investors” are gone to more fertile fields.
I chuckle when I advise folks to buy HERE NOW (Referencing a specific section of town), and their response is:
“Who’d want to buy anything THERE? There’s NOTHING happening THERE!”
Of course, they are RIGHT that there’s NOTHING happening. If there were a lot of stuff happening, the window of “Great Deal Opportunity” would be CLOSED.
Same goes for new construction and bank financing . . . What are y’all waiting for? By the time you get the guts to put some specs on the ground, the “moment” will have passed.
The investors wh make the most money take the most RISK by JUMPING BEFORE all the others and trail-blazing new markets.
Sometimes they’re wrong, but when the remainder of the market is trending upwards, they’re happy with slimmer margins until the the momentum builds.
A bunch of slimmer margin profits which grow with each iteration far outweigh the “Sure Bet” of entering the game late with higher margin.
The game isn’t as much about creating appreciation as it is about fulfilling Buyer Demand.
Don’t let lust for profit lure you into the fatal trap of chasing the market instead of creating it.