At the top of the list as to why people think the house market has crashed is that the media says so. What has anything in the main stream media got to do with you? The stock market and the gold market are world-wide markets, so people in that sector have to keep an eye on all the things that are happening world wide to be able to buy and sell at the right price and at the right time. In contrast, the single-family house market is a local market that depends upon a national credit base.
In some respects we have to keep an eye peeled on interest rates and on underwriting standards; but the prices of houses we buy and sell are dictated by local demand, the motivation of the sellers, and our individual ability to find and negotiate good deals that we can hold as long term rentals, or resell at a profit.
If you’d like to test this statement, see if you can find anybody who is still making a lot of money in the current market in your town. If all the entrepreneurs are going out of business, that means that you have an extraordinary opportunity to snap up houses at deeply discounted prices. If you find that you can’t do that, that’s pretty clear evidence that the market is up and operating where you live.
Doesn’t it make sense that if house prices were crashing in your town, that you’d be able to buy just about any house you wanted with very attractive seller financing. This would be a once in a lifetime to buy at the same prices as people did prior to the boom. Rental houses would cash flow once again. Why wouldn’t you load up on as many of them as you could buy? I did this in the “crash” of the early 1970s and when the market came roaring back during the Carter Administration, I owned 50 houses that were accruing about $10,000 a month in equity. I put myself into this position by buying when all around me were waiting for prices to come back. You can too.
