I occasionally wonder if some publishers are pushing an agenda, or if they don’t follow the trends closely enough before they give advice to us common folk. I say this because many of the well respected finance websites I frequent have been increasingly hyping real estate as if it were a serious bargain, or in the more aggressive articles, that we’re a fool not to jump in now.
For example, take a look at a few of the images I captured over the last month or so.
Not to go all A Beautiful Mind and start finding hidden messages in periodicals, but have you noticed the growing frequency of positive overtones about real estate coming from mainstream financial media?
I’m all for being positive, but the simple fact is that real estate prices are expected to fall even further according to Zillow.com trend analysis. If you needed more proof that the slide isn’t over, just look at the unprecedented (more like desperate) programs the U.S. government is rolling out to put a bottom in the real estate market. These programs do nothing but give a short term boost, much like a sugar high, where they make the numbers look solid by enticing a few new buyers off the sidelines, then after the rush is over, the downward correction goes on it’s merry way.
I get that it’s important to inform readers that it’s a good idea to buy financial assets when prices are depressed, but just because something loses 20% value from it’s all time high, doesn’t mean that it’s a bargain. In fact, if you study the psychology of an investment bubble, this sort of rationalization is known as a “bull trap“. And let’s just say the results of falling for aren’t pretty.