Sacramento Real Estate Views

Gambling…What’s Your Strategy?

I’ve never been much of a gambler. My family and I are in Reno this weekend burning up some time share points and just getting away from the house for a couple of days. My in-laws invited us and they are always fun to hang out with. ( I mean that!)

My wife has always loved to gamble. She has taught me so much about playing cards. I enjoy poker with the guys periodically and I always have a good time. Gambling in a casino, however, has always made me feel uneasy. I used to think it was the excitement of being in the “action”, the thrill of the possibility of hitting it big. The more I hang around casinos the more I identify this as just being uneasy.

This evening I walked across the street from where we are staying to the Sands Casino off of Arlington in Reno. I watched, as I often do, just interested in how others play, watching their reactions, seeing how the cards fall, observing the dealers busting players…what I call “sitting on the fence”. I was on the sidelines watching the game.

I know one thing about sitting on the sidelines: If you’re not in the game, you have no chance of winning. No chance.

If I lose, I have no chance of learning from it. To not risk is the greatest risk of all.

I was just about to leave and head back to the condo to take over for my wife who was putting our son down when I thought “OK what the heck, I’ve got $20 as my budget (I just don’t feel comfortable doing this) and if I lose then I’ve minimized my losses and if I win, I’ll double my money.”

Unlike investing in real estate, the longer you sit at the blackjack table the worse off you’ll be, generally speaking. My blackjack strategy is to always play no more than two hands and bet heavy with your entire budget. Win or lose, I’m done. This has paid off in the past. No dipping into reserves, no deed to the house, establish your budget and get it over with. (can you tell I enjoy this?)

I plunk down my $20 and the first card the dealer gives me is an ace. I thought, sweet, nice start. Then he gives me a 10, 21! He pays me $30 on my $20 and I say thank you very much then head for the barn. I’m buying breakfast! (my wife was not as fortunate!)

This story could’ve gone either way but my strategy works for me and evens the odds, in my own mind anyway. One thing is for sure. I would not have won had I sat on my split rail fence acting like I knew what I was looking at.

So what’s the strategy with investing in real estate? This market has proven that if you plunked down your money last year or the year before or the year before that, you left for the barn without your $20. That just makes me feel uneasy. How about you?

What about today? If you are sitting on the sidelines acting like you know what you’re waiting for, you’re not in the game. Conversely, if you’re buying today with the thought of turning it in 2 years, I don’t think that’s a safe bet either. Real estate has traditionally been a long term investment with a great payoff.

Buying today and holding onto your investment for 10 years will result in one of the safest bets of all. Waiting for the market to drop further, now that we’re into this for 3 years is historically foolish if you’re serious and are able to buy. The bottom is near and buying activity is increasing. This is a cyclical industry. What goes up, must come down and what goes down will eventually come back up.

The light is at the end of the tunnel, folks. At the risk of sounding redundant, you’ll kick yourself in two years for not buying this year. In two years, prices will be higher than they are today and as George Zimmer of the Men’s Wearhouse says…”I gaurantee it.” ( I love shopping there, they take such good care of you )

This is one bet I feel completely comfortable with.

Related must reads:

Don’t Miss The Opportunity of a Lifetime!

Buying A New Home?

Ignore the Headlines

Tags: Sacramento homes, sacramento real estate, Sacramento real estate market

Listen to your Grandma! News from the trenches..

The Sacramento real estate market over the last few years has left much to be desired but the signs are there that this nightmare is coming to an end…the proverbial “light at the end of the tunnel” is appearing, the angels are singing on high…Oh the Rapture! aahem! Sorry, it’s been a good month for us so far and I’m excited.

With all of the negative media talk, it’s hard to hear through the shrieking to get to what’s going on out there right now.

In the new homes market, builders are generally the last to feel the market pinch and the first to see the signs of recovery. One of the reasons for this is that the larger builders are publicly held companies that have boards of directors and stock holders to answer to. They will do everything they can to get homes sold, meet goals and that means they price their homes right, some offer incentives or give things away to motivate people to buy.

This last weekend, the builder I work for, Pulte Homes, Inc., had a sale. It was a nationwide event where we offered 4 free options, this primarily was directed at homes that are “out front” or yet to be built or six months with no payments, closing costs paid, directed toward inventory or 30 day escrows.

Our national goal for this event was 60 homes sold for our division. We shattered that goal, shattered I tell you!

Of the homes sold that weekend about 45% were sold in the active adult communities of which there are 2 in the division. This is significant. Why, you ask? The active adult buyer is one of the most savvy buyers in the market. Typically they have bought and sold many homes. They have been through many downturns and know what the signs of recovery look like.

While they may have years of equity in their current homes, they are generally on fixed or limited incomes and don’t often like to take risks unless the risk is minimal.

Traffic at our communities is up 39% since the first of the year and cancellation rates are down 8%. More people are looking and less people are canceling. If fewer people are canceling and most who are buying have homes to sell, the resale market must be picking up as well.

Mike Lyon from Lyon Real Estate is quoted as saying recently that the pending sale number doubled from December to January. I spoke to a Coldwell Banker agent today who told me he lost an all cash offer he made for a client on a property recently. Why?

Because there were 8 other offers on the same property. Multiple offers? In this market?

45% of sales in the active adult communities. Are your grandparents trying to teach you something? Something that even the SacBee doesn’t want you to know? I think so.

Ignore the headlines…this is an awesome article by a nationally known money guru…take it to heart. Your Grandparents have!

Tags: New homes in Sacramento, Sacramento homes, Sacramento real estate market