The 5 Mindsets Of Real Estate Consumers In 2016
What are real estate consumers thinking about in 2016?
There is significant contrast in how homebuyers, sellers, investors, and industry workers see the real estate market. In fact, there may have never been more disparity in recent history. So what are they thinking, and how will it impact the market?
The following represent the 5 real estate mindsets I am aware of in today’s market:
1. All About the Money
Recent criticism of Fannie Mae’s new, more lenient loan programs and pressure on lenders to make more aggressive loans is giving some a flashback to the party days of subprime lending. Some are fully aware of the dangers of wildly fueling the market, and the potential costs to taxpayers, but they don’t care, as long as they make buckets of money in the meantime. This applies to investors, home buyers, industry workers, and companies. Those that really understand the market will be enjoying the ride for what it is, and stashing some of their new riches away for later.
2. Obliviously Bullish
Optimism is good. Yet, in contrast to the above, this group doesn’t even see the risk. They may not have experienced the crises of the early 2000s, or know their real estate history. There is nothing wrong with being bullish, and taking full advantage of the current market opportunities. However, to blindly believe that “things are different this time” may not be realistic either. There is money to be made in all market phases, but those that aren’t prepared to operate as the market heats up aren’t going to enjoy a long run.
3. Recovered, Insulated, and a Lack of Compassionate
Some have posted online that they have fully recovered from 2008, have insulated themselves against any negativity in markets, and don’t have any empathy for those that may make real estate investment mistakes. They have positioned themselves well with passive income producing property portfolios, have diversified their assets, and are happy as long as their own finances are covered.
4. Still Scrambling, and on the Verge of Panic
Others say they still haven’t recovered from the economic roller coaster of the last couple decades. They are still barely making ends meet. The thought of a new economic downturn that might lead to a tougher job market, uneven home prices, and plunging stock values has them on the verge of panic. Many in this group would find they would greatly benefit from real estate investment. Some will seize the chance to wholesale and flip houses to catapult their finances for the better. Some will do it. Others won’t adapt.
5. Confidently Embracing the Future
There is another group; they may or may not have been in real estate through the previous ups and downs. Either way, they are sensibly and optimistically working on growing their investments, finances, and legacy. They are not going to let today’s great real estate opportunities slip away from them. And no matter what is ahead, they are setting themselves up to weather it smoothly, and are confident they can reinvent themselves as needed to keep up, and stay ahead. Many in this last group are also vigorously embracing the sharing economy, and are happy to share their knowledge, experience, and success with others.
There is quite a diverse set of views among those out there in the market today. There is potential for all of them to do well in real estate over the next few years. Some may not be helping the market, or themselves, in the long run. Others won’t embrace action enough in 2016, and will pay the price for years. Then there are those that will make great traction this year, and will invest well. Eventually this last group may even grow to become the next generation of real estate coaches, inspirational leaders, and billionaires. Whichever group you fall into, it is good to understand the mindset of the others out there. Not everyone needs to think the same, but understanding the others can help everyone create more win-wins.