Wealthy by being afraid-NOT
Wealthy by being afraid-NOT
I subscribe to a number of market and financial newsletters—some I thoroughly enjoy reading and can align with the author’s thoughts and opinions, while others I do not agree with at all. But even though I do not agree with a few of the authors, I still continue to read their newsletters. The reason why I still read the newsletters is because I believe that the more information, the better. It is then up to me to distinguish what I believe to be is true and what is not.
One author that I initially aligned with and found very interesting was Harry Dent. Dent is an economist and forecaster of markets using the science of demographics. Dent’s logical approach—or what I thought at the time was a logical approach to forecasting trends—resonated with me for many years. What intrigued me back then still intrigues me today: the science of the demographics. However, over the years I have found Dent’s research to be more doom and gloom; preaching of fear. Maybe it is fear that helps Dent to get the headlines and sell more books; however, I am tired of his approach and thoughts, and I have tuned him out.
I would much rather view things from a positive perspective as I do believe that things are getting better. Unfortunately, just like the news on television, the good stories and forecasts do not seem to find their way to the masses. Let us take the BC Aircare program for example. The BC Aircare program began in 1992. Its purpose was to curb emissions from motorized vehicles because there was the belief that our air quality was going to be equal, if not worse, to the air quality in Los Angeles, California. The program ended in 2014 with the results of better air quality and more vehicles on the road. Now there is a good news story. Proof that good things are happening, but viewers and readers tend to gravitate away from headlines that promote a good news story.
As I write this, it is December 31st, New Year’s Eve; a time of the year when many people make resolutions and commitments. I think a great resolution for the new year would be to qualify where you get your news, and in this case, your Real Estate Investment News. Try as I did: get your news from many different sources, and then decipher what is of value.
A new year commitment I am making is to mindfully believe things will always get better. What I read will certainly be a catalyst to helping me succeed in my commitment. I recently read that the best way to bet on things getting better is to bet on the long run. It may take years for it to be better, but in the long run, it will be better.
Anybody reading this has a keen interest in real estate. If we put the concept of betting long on real estate and look back over the past ten, twenty, or thirty years, has there ever been a bad time to have bought real estate in the Fraser Valley or Greater Vancouver? The answer is no, even if the purchase was at one of the peaks of the many market trends. Bet long on real estate and in ten, twenty, or thirty years, you will be wealthier than you ever imagined. What you see and what you read you become. Be wise in the new year—buy wise, sell wise. Real estate investors do not become wealthy by being afraid.
Headlines continue to talk about the hot West Coast real estate market and that Vancouver is locked into a bubble market. I agree with the market being incredibly hot throughout Vancouver and the Fraser Valley. However, I see no bubble market at this time. We are certainly experiencing a boom cycle which is evident with the December 2015 real estate numbers being off the charts, literally. Every city, sub area, property type, and price range being significantly stronger than December 2014. Record low inventory and record high sales pushed the sell through rate (STR) in some areas through the 50% range in Greater Vancouver and Fraser Valley. Basically, when the market is selling through at a pace of 50% or greater rate, it means the buyers are buying more homes than there are listings on the market and the inventory eventually is depleted to point where it seems like there is no inventory or homes available to buy. For a bubble market to exist inventory levels would need to grow significantly and sales slow, the opposite of the current trend. Today, January 2016, the shelves are empty and the shortage of homes to buy is causing a buying frenzy and multiple offer bidding wars, a very frustrating process for the buyers. However, if you are a seller, it is an amazing opportunity to sell for prices you only dreamed of a year or two ago. Please feel free to call me if you have any questions regarding the market or anything related to real estate.
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By Randy Dyck
Personal Real Estate Corporation
604-807-4366 or randy@eximus.com
STR (Sell Through Rate) Formula = Sales ÷ Active Listings + Failed Listings + Sales
