Shari points out that there are many who are waiting on the sidelines and wonders if we won’t see a second boom when they return. This is a common thinking of people when a bubble first collapses, but almost never proves to hold. Often you get a small correction back up, somewhere around halfway down, but then things turn back to trending down. This is often the case when the stock market drops or commodities drop.
Regardless if it’s stocks or real estate the psychology is the same. When the downturn first starts people sense an opportunity. But by the time the market settles at the bottom, people are more scared, having seen others burned and witnessed some having their fingers cut off while trying to catch a falling knife.
If most of the predictions on this board are anywhere near accurate, it will be a year or two before things bottom out. By then the real estate thinking of many of your investors will probably have changed. First off, many people will realize by then that values won’t pick up for quite some time. There will be far more understanding that real estate isn’t historically a very good investment. Probably lending will not be loose and readily available. Plus, most of the non-investors will have become gun shy. After seeing friends or maybe themselves foreclosed on, the average joe is gonna be a lot less likely to take on a mortgage. So, you maybe be sensing a lot of waiting buyers right now, but the overall number of people willing to plunk down their money is dropping, and will continue to drop. And that’s what matters, not the number of people who say they are waiting to buy.
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