I can barely have a conversation these days without the words “in this economy” creeping into it. As in ”how about this economy”, ”what are you suppose to do in this economy”, or “who is spending money in this economy?”  It reminds me of the New York attitude, where “what do you expect, its New York” is an absolutely acceptable response to any complaint one may have about the city. As a Philadelphian who travels to NYC regularly, I do understand the New York attitude and often agree with it. It is the city that never sleeps after all. But I find the pervasive ‘in this economy” state of mind very unfortunate, so the following is a quick summary of what I learned at Wharton Business School.

First, the #1 rule in economics is Buy Low, Sell High. Prices for almost everything are in most cases, quite reasonable now. Blue chip stocks are at a decade low, autos are being sold at close out prices and there are so many real estate bargains it is being coined deal estate or steal estate. Anyone who has money or the ability to obtain it through a low interest mortgage should be out scouting for deals and negotiating the hell out of one. Moreover, now thanks to the new phenomenon in appraising of using out of area appraisers who are not familiar with the neighborhood and only use comps from the past 6 months you might even pay less than you bargained for because the bank will not mortgage that amount. Due to this, I recommend that even if you are paying cash, to get an appraisal.

Second, when everybody is buying you should be selling and when everyone is selling you should be buying. Please try to buy in a buyer’s market, try to wait it out in a seller’s market. I truly feel sad for people who owe more than their home is worth right now, because it is their home and not just a bad investment. However, one has to ask what were they thinking? If every TV show, newspaper and magazine was talking about housing bubbles bursting, the top of the market and price increase of 100%, 200%, 300%, these buyers should have took noticed. I’m not saying that they should not have bought a house, but they should have not have bought a super priced home with no comps. Of course their bankers and agents did not stop them either, but the final decision rested was with them. Remember, the buyers set the prices, as they are doing right now. If they are not willing to pay the prices, then the prices will come down. It is the very simple rule of supply and demand.  

Finally, remember, that the real estate market is cyclical and this is just a buyer’s market, the seller’s market willl be next. I promise it will come back around, it always does. Moreover, interest rates are still ridiculously low and the government will actually give you $8000 to buy a house if you meet minimum qualifications.  If you have the stomach for it, stop making excuses, stop complaining, and start amassing wealth. BUY NOW, HOLD & SELL when the market is hot again. If not, in a couple years you will be kicking yourself for missing this opportunity.

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