Housing Market - A Different View from the Bus but Same Ole Extremes

Can anyone remember a time when you couldn't make a decision fast enough? If you didn't pull the trigger by putting in an "over the asking price" offer within hours of your future dream home being listed on the market, it was going to the next eager home buyer. Perhaps you felt left out if you weren't buying. Gee, what's all the fuss about?

Forget about the financing, that was a guarantee. Too high debt to income ratios? Not enough income? Poor credit? Perfect, we've got just the right product for you. In fact, your interest rate will only be 2.5% and if you really want that $500,000.00 home, go for it, we can make it work. Don't you worry.

Now, the bus tours are back. The only difference, the views. Before, it was jovial discussions with your fellow investors, everyone pondering how much the homes would appreciate in the next two months. "What do you do for a living?" "I'm a real estate investor." "I'm looking to buy a couple of homes today, how about you?" "I'm a real estate investor too and I'm looking to buy two, maybe three homes today! In fact, I quit my job yesterday to do this full time."

Fast forward to 2008. "I love this home, it sold for $500,000.00 in 2005, now it's selling for $225,000.00." The obvious question follows, "You're going to buy it right?" The response, "No, there's probably a better deal around the corner."

These behaviors are predictable and are never going away, neither are these cycles. Oftentimes, these reactions cloud our judgment and lead us to making poor financial decisions. Part of having success is learning these behaviors.

We always seem to learn our lessons of the past until we get drunk on the good times and the promise of a better future, always forgetting that for every action, there is a reaction.

Why do we always choose to live in these worlds of extremes? How come most people fail to realize that this behavior gets them what they've always had .... financially speaking, not much?