The way we talk about real estate has changed dramatically in the last few years as the collective sentiment has shifted from euphoria to panic. No one would dare to say “the only way is up” or “the easy money is in flipping” anymore. Here are a few other phrases that once seemed just as true.
* “You don’t need a down payment.”
* “You can refinance before your rate goes up.”
* “Just get a home-equity loan.”
Let’s look at “location” today.
“Location doesn’t matter.”
Housing was appreciating so rapidly in seemingly every market that some people thought that no matter where you bought, you’d soon make a fortune.
It’s hard now to believe that anyone was promoting such a myth. After all, even people who claim to know nothing about real estate can rattle off the famous adage, “location, location, location.” More than anything else, where a home is located determines its long-term value. A state-of-the-art kitchen can quickly become outdated, but a nice part of town can remain that way for generations.
Even some places that seemed like great locations turned out to be terrible bets. For example, Las Vegas went from having job growth four times the national average and attracting 4,000 to 5,000 new residents a month to being dubbed “Foreclosure City.”
As you can see these sayings are no longer true in today’s market. Check back for the rest of the week to see why and what you should be doing now to remain profitable in the real estate market.