Are You Waiting on the Sidelines? - by Bill Bronchick

Deja vu - this is 1988 all over again. Are you sitting on the sidelines, or are you in the game, buying up bargain properties? Time Magazine ran a cover story article this week on the housing market, which quoted me about the opportunities of buying when things are down:

http://www.time.com/time/magazine/article/0,9171,1661679,00.html

Many investors are waiting on the sidelines of this real estate bust for things to get better. They will eventually. While the news is mixed on when the next boom will happen, they all agree on one thing - it will boom again. Population explosion from immigration and demand for U.S. Housing will continue on a steady pace for at least 40 years. Real estate doesnt boom and bust, it just comes and goes in waves, causing a doubling in prices every time around.

Many are sitting on the sidelines waiting for the green light to buy, and this may not be the best idea. Bargains are everywhere, and interest rates are still cheap.

The federal reserve cut the funds rate by 1/2 percent today for the first time in 4 years. The fed rarely does anything like this once, so expect further cuts ahead. What does this mean for investors? Lower rates means more buying power, which may stimulate more buyers back into the market. If the fed continues in this direction, we could see an earlier recovery of the market, and those that wait it out may lose out on bargains!

When the overwhelming news is negative, that generally signals the bottom of a market. If you are waiting until TIME magazine cover says the market is rebounding, its a mistake. By the time the media signals the green light, it will be a year too late!