Lately there is news that consumer confidence is still down. Well, of course it is. Uncertainty is what drives confidence down. Nobody wants to leap off of a cliff without knowing that there is enough water in the lake below to safely splash down and swim off. Furthermore, not knowing if there are jagged rocks just under the surface just adds to the belly-butterfies. That seems to be where a lot of Americans are right now when it comes to the housing market. We feel like we are standing at the edge of an overhanging cliff ready to jump. But we are worried about what awaits us below the surface. What do we do now? Some people will test the waters, maybe throw a pebble in to see how it reacts. Maybe call down to a friend that already jumped and ask them how it went. They might even climb down and get a closer look. They still can’t quite see under the surface, but they feel as though they have taken the appropriate steps to make the right choice to jump or stay sitting on the ledge. Others simply jump to find out.
I am the one that needs to know what lies beneath the surface. Almost to a fault I will try to get to know everything I need to know before I jump. Sometimes that means that while my friends are jumping in and having a great time, I am just sitting on the ledge, watching, waiting. Boring, right? Oh, I’ve jumped before, many times. I have had an incredible time screaming through the air and splashing down and feeling the incredible rush of it all. But I have also come way too close to those jagged rocks. I have seen that lake bottom coming at me way too fast and not being able to stop my decent in time to crumple my legs on the rocky surface below. It hurts. And nothing helps a person learn a lesson more than scraping along the hidden, jagged obstacles and hitting that rock bottom. It takes that sort of a ride to learn that being prudent might be the better choice.
Simply jumping is not always a good idea. Admittedly, It is the most interesting way of going through life. Not knowing if you will survive the jump until it is over is exciting and gets the heart pumping. It might be OK for an adrenaline junkie with a death-wish. It is not such a good idea for the prudent investor. My heart rate is just where I want it to be. I have lived that life, I have learned where and when to jump, and now my excitement comes from knowing that the decisions I make are the right ones.
I read housing reports and real estate related articles everyday. Some speak of recovery, others add to our fears of yet another downturn. Who do we believe? What article is right? Where is real estate heading? Should we jump yet? The best way of knowing is to get know your own market. Real estate is local. Know your neighborhood and the also know the neighborhood that you want to buy in. Whether it is to live in or invest in, know your market. Or get to know someone that does! Seek out an expert in your own market. That expert has the knowledge of where those jagged rocks are and has the tools to be able to judge where the bottom might be. Once you get that knowledge on your side, you will be able to jump with confidence!