When the market turned up in the late 1990's the balance of power in the market shifted. During the last decline, the buyers had an advantage. During the bubble the advantage went to the sellers. The seller's market went on for so long and became so feverish that people have forgotten (or may never have known) what it was like to see buyers in control of the action. The purpose of this post is to re-educate buyers on how to behave in a buyer's market. Buyers have the Power As a buyer, you must remember you are the one in control. You are the scarce commodity in the marketplace. The seller is one of many for you to chose from,…[READ MORE]

Like the change of seasons, real estate markets move in cycles. During the last cycle, the real estate market peaked in 1990, and the market bottomed in 1997. The primary reason the bottom formed was because incomes and rents finally caught up to housing prices. They say a picture is worth a thousand words.These images are both from 1997. The first appears to be from a condo development in Orange. The actual pricing is not important: the relationship between the cost of a rental and the cost of ownership is very important. This is why the bottom formed. The next time someone tries to convince you the cost of ownership is near the cost of rental, remember the simple calculation…[READ MORE]

Do you remember in Houses Should Not Be a Commodity, there was a long discussion on the stages of grief as they relate to the housing market? The market is shifting from denial into bargaining. Jim Cramer has made news lately with his antics. The links below are to videos where he has demonstrated for us the following progression as it relates to the chart above: Denial -- On housing, November 2006 Anger -- He is always angry. His show is Mad Money... Depression and Detachment -- Plow under the Inland Empire Dialogue and Bargaining -- Lobbying for a Rate Cut When you think about it, isn't the whole discussion about a bail-out bargaining? We all know the government is…[READ MORE]