Real Estate Investing, buy low, sell high
Looking at the Real Estate Market in Virginia Beach from 2001-2005. I think it's funny the way most people think. We were all taught to buy low and sell high from pretty much the day we were born. This isn't what people do however. When people start to notice that the prices of real estate, or stocks, or anything for that matter are going up, they gain interest. Only after seeing sustained increases over time, do many people start to think it is a good idea to buy. They think the double-digit increases will never stop, and they soon will be millionaires. I have to admit this happened to me in the stock market tech bubble burst in 2001. I turned $5,000 into $40,000 to that point, but I got greedy and lost it all.
People start to buy real estate, I've noticed here in Virginia Beach, after the prices have gone up substantially....Granted, they bought at low interest rates, but the prices were high. Now we are seeing a trend of increaing interest rates, which means the market is slowing, and it is much easier to get a bargain price. Yet people sit on their hands. People would rather get a house at a high price and a low interest rate than a house at a low price and a high interest rate.
Me personally, I would rather get a house at a bargain, and re-finance it later. Most people follow the herd. The only way to be financially successful is to go against the herd, and follow simple economics...buy low and sell high.....despite what happens to interest rates. When the interest rates drop again, the prices will go up again, and you will be glad you made the tough decision.
