A Picture is Worth a 1,000 Words

When we talk about leverage, one of the most overlooked forms of leverage is images. Anytime I'm looking for a shortcut or a time hack, I try to find ONE picture to expedite the learning of 1,000 words.

To that end, here are a few slides that I saw this past week, along with the sentences I use to drive the point home.

The Conversation: The media might make you think home prices are about to crater and that 2008 is going to repeat. The truth is: 70% of households in the US have at least 50% equity. That makes today’s real estate market very different from 2008!

The Conversation: Home prices are governed by Supply and Demand. Even though the Fed keeps attempting to "cool off the market" by raising interest rates, the reality is that we still face a supply challenge. New home starts have to stay around 1 million a year for us to avoid a supply issue. When you examine the deficit between 2008 and 2019, it's easy to see why prices are still on the rise!

The Conversation: If you are trying to decide if you should wait to buy, I would tell you that over the past 30 years, it made sense to "buy then wait!" Over the long term, the real estate market follows a steady path of appreciation. And based on this, if you are betting on a correction, you might find that a correction in the market is likely to be much smaller than the media makes it sound.