The MLS in Bend with hundreds of homes for sale and dozens of farms and ranches is teeming with value. But many are looking at the current prices, shaking their collective heads and declaring that the economy and, with it, the real estate industry is still in freefall. Well, let's join author and financial adviser Robert Kiyosaki as well as many other financial experts who predict the best time to invest in real estate is NOW!
Let's look at the cycles Kiyosaki and others observe.
1. Financial Disturbance. Such as the invention of the Internet, 9/11, war, etc., which creates a new wave of events that include outside shock, news that creates a disturbance, war, technology, and a new monetary policy which results in the government pumping money into the economy (i.e. lots of money is now available) Year 2001
2. Expansion. Prices start to rise, which results in the combination of both easy credit and greed beginning to set in. Years 2002 and 2003.
3. Euphoria. Future returns are overestimated, there is a lack of concern regarding the fundamentals, "fools rush in," and speculation becomes commonplace. Year 2005
4. Prices Reach a Peak. At this point, market strength becomes fragile, cheap money becomes scarce, insiders are taking the profits and the greatest fools now rush in (March 2006)
5. Market Reversal. This is where prices begin to fall and speculation comes to an end. Years 2007 into 2008
6. Financial Crisis. Panic ensues throughout industries, bank lending tightens in response. Year 2008
7. Lender of Last Resort Comes to the Rescue. As we have all watched occur over the past weeks, Congress steps in, printing too much money and bailing out businesses and individuals, and this signals that the bottom of the cycle is now. BEST PHASE TO BUY!!!
It is clear to those keeping an eye on the current condition of the US economy and the recent steps being taken to correct it that we are now in the 7th stage -- which is the best time to take advantage of the pricing and financing opportunities that are anticipated to be available only for a limited period of time.
Source: Robert Kyosaki (Yahoo Finance "date"), paraphrasing Nobel Laureate Hyman Minsky's "Seven Stages of a Financial Bubble"