Perceptions More Important Than Facts?

I've been reading articles from leading minds in the real estate market who are attempting to forecast the beginning of a recovery. Here's an interesting one from the Wall Street Journal entitled, "The Housing Crisis Is Over". In it, the author, Cyril Moulle-Berteaux, says that we've hit bottom and "...that the trend is no longer getting worse, which is the critical factor."

Moulle-Berteax goes into the historical data and has a lot of good reasons for his statements, but will he be right?

I tend to be an optimistic type, but I also strive to know the truth and look at the facts of the situation. However, in this case, perceptions may be more important than the facts.

I took a minute to read over a few of the comments to the accompanying blog and the overall tone was that we have NOT hit bottom yet. Further, an NBC/WSJ poll on April 30th reported that 81% believed that the US was currently in a recession.

By the formal definition, we are not in a recession, however, with 81% of the public believing that we ARE in a recession, then for all intents and purposes, we are.

Gary Keller makes this exact case in a recent white paper released to Keller Williams associates:

Wisdom of the crowd, perception is reality, what you see is what you get. If it’s true for you, it’s true – any way you want to posture it. We’re saying that if it walks like one and talks like one, it is one, and we might need to face that reality.

What does all of this mean? Here are my two thoughts for the day:
1. It has become even more important to be an expert on the LOCAL market. Keller also says, "What’s happening within your local markets is all that’s relevant." Even within the broader Nashville market, different neighborhoods have different dynamics going on.

2. Buyers are super-cautions right now. I can't blame them for that. Buyers are looking at more homes and being picky. They want to know that they are making a sound investment and making good choices.

I guess we'll wait and see when we hit the bottom. Of course, we probably won't know it when it happens, but since we all need a place to live, it will happen.

-Peter
www.NashvilleCityHomes.com