experts: real estate column Wednesday, September 15, 2004

Is it the beginning of the downturn?

No matter what subject I write about, the questions in the last two months are always the same: Is it a bubble? Is it over?

By Ozzie Jurock

This article appeared in The Vancouver Sun on Sept. 11, 2004

No matter what subject I write about, the questions in the last two months are always the same: Is it a bubble? Is it over? Is it turning into a buyer's market? Should I sell now and buy back when it crashes?

This week in particular I received a number of e-mails pointing to a 19% decline in the number of sales over July 2003 ... Is that the beginning of the downturn?

I guess, I always have the same answer: It isn't the market, it is the deal YOU personally make, period. Of course, people don't want to hear that. It implies that I have to do some work, ask myself some serious questions. Like: Do I want income? Do I want to earn a profit through a quick sale? Have I identified an area I actually want to own in? Do I know what exactly I want to own? No, we want to know whether it is a good market.

Of course, I don't blame them. Because to some extent they are right. I teach in my real estate investment courses, that it is timing not the old location, location that has made the biggest profit for the average person.

But it is timing plus understanding oneself that really matters.

What I have learned over the last (swallow hard) 37 years of buying and selling real estate is that at any time there are two prevailing camps debating question about whither this or that in real estate markets. I run a real estate talk website, www.realestatetalks.com, where people from all over the world debate real estate issues. And whether they are debating BC or California there are clearly two camps of posters to the bulletin boards, just as there are responding readers to this column. Some will always see every statistic as an opportunity to forecast hell and some will always forecast nirvana ... I mean always ... for years.

And so I have learned that there are the 'yeah-butters' and there are the 'pony seekers' The latter refers to the old story where a mother saddled with twin boys that were totally opposite to each other - one always happy and the other always miserable - takes them to the psychiatrist who comes up with an astounding suggestion. On their birthday put the pessimist into a room full of new toys and give the little optimist a room full of horse manure. The desperate mother does this and on the birthday peeks into the pessimist's room. There he is complaining: "I have so many toys I do not know what to start with and I bet they'll break." In the little optimist's room, there he is with a shovel, flying through the horse manure, shoveling madly. The mother says: "Sweetheart, what are you doing?" The little optimist cries: "Mom, you can't fool me with all this horse manure, there just has to be a pony in here somewhere!".

I have all my life been accused of looking for that pony as far as real estate is concerned, just as there are others forever looking for the negative side of things. I mean read the Bob Prechters, the Howard Ruffs (but read them from the 80's), The Daily Reckoning, or books by Ravi Batra ("The Great Depression of 1990") you'll get a predictable negative 'run for the hills' forecast; read my book or my newsletter and you will get a predictable 'look for the pony'.

So in today's crazy world, the 'yeah butters' point to higher interest rates, falling volume or this or that negative statistic and come up with a long term conclusion "all will be bad". And I will point to the most under reported inflation in history (real estate: Britain year over year up 20% across the board! Vancouver's average single family home up 22% to $521,782, Vancouver Island 18% higher. Oil: up to record highs. Lumber: almost double in a year. Construction boom: Olympic building not even started yet) and conclude that hard asset real estate will be much higher in the future. OK, I see the pony, others 'yeah but' away the statistics.

But the real estate market just is. It is a hard asset and in this inflationary world (yes, inflationary world) it will continue to perform in Vancouver just as it has for 50 years regardless of this or that market condition.

For more real estate investment advice, visit Ozzie Jurock's website at Jurock.com.




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Related Links:

Real Estate Action Group

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