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Stray From the Herd
By marionduffy | January 19, 2009
In a recent Orange County Register article, “O.C.’s Expert Observers Tell What’s Scary“, REALTOR, Steve Thomas comments on “herd mentality”. This is similar to what Donald Trump refers to as “group think” in his audio book, Why We Want You To Be Rich, co-authored with Robert Kiyosaki. Herd mentality or group think is when people do things because everyone else is doing it. Trump encourages people to “think for themselves” rather than just following the herd.
A few years ago when the market was rapidly appreciating, it seemed like some people were buying just because everyone else was. Many didn’t do their homework and just assumed the market would continue to appreciate indefinitely. They just figured it was the right thing to do because the rest of the herd was doing it.
But, the real estate market is cyclical. It has its ups and downs, just like most everything else. Now that we are in a down market, I think that much of the herd of buyers think that prices are going to continue to go down indefinitely. After all, that is all you hear about in the media. Now it seems that a lot of buyers are actually waiting for the prices to start going up before they are comfortable buying. In my article, “Should I Buy Now Or Wait for Prices to Go Down More?“, I discuss trying to time the exact bottom of the market.
However, some people, particularly investors, are taking advantage of our current market. Those who have strayed from the herd and who can “think for themselves” understand real estate cycles. They know that this down market will not last forever and that we are now somewhere near the bottom.
When the market turns around and starts to appreciate again, people who buy early will eventually make money. But the buyers who strayed from the herd and bought when others were afraid to buy will be the ones who profit the most.
Topics: Buyers, Real Estate Prices, Investment Property, Orange County Real Estate |