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Crabs in a Bucket

 

Do you ever feel like the economy is dragging you around? Do you get nervous every time the stocks dip? You can break from from this cycle, and free yourself from the “crab in a bucket” ways of the national economy. Crabs in a bucket refers to the way crabs will pull each other down when put in a bucket, so you never have to put a lid on it. Very similar to the way the stock market will pull your investments down as it loses value. On a national level our economy is affected by other countries, on the state level we are affected by other states, and on the local level we are affected by other cities, all the other crabs are trying to keep you in the bucket. So how do you get out, especially with other countries like China and Greece struggling economically?

 

You learn to adapt, here locally we are not experiencing the same struggles as larger cities, because our housing market was able to bounce back quicker, and our job market is growing again. That’s good news, that means we are already one step ahead to break the cycle. The next step is to make sure you are not overexposed in the stocks and treasuries market. As many finance professionals will tell you, we are due for a stock market correction, even though we just had one in 2008 and before that in 1999.  The housing market on the other hand, did have a correction in 2007, but before that the last major correction was in the 1930s. This means the housing market is on an approximately 75 year cycle, as opposed to the stock market that corrects every 9 to 10 years.  That makes the housing market a safer investment, especially here in Colorado Springs, where our housing market has grown 6% in the last year. When you buy an investment property or keep your existing home while upgrading or downsizing you are separating yourself from the rest of the “crabs in the bucket” and eventually you will be so far separated that they can no longer pull you down in the next economic downturn.

 

Another way you can separate yourself is to evaluate what everyone else is doing and do the opposite. Investing in real estate is far less common that stocks, but real estate is going to be a very strong purchase for the next five years. We have the largest consuming generation in history, born between 1982 and 2004. As these Millennials start to hit 30s and 40s our economy will expand regardless of any other countries, who the president is, oil prices or anything else.  87 million Millennials turning 30 to 40 years old with families to raise, houses to buy, student loans to pay, and cars to buy, shows that our economy is growing, and will continue to grow at an unprecedented rate. If you are invest in the markets that are influenced by other slow recovering markets, you will be stuck in a slow recovery time, and may be subject to losses when the market corrects. Colorado Springs real estate is dramatically removed from other major cities markets. Here our housing market is thriving and growing, as our job market is growing and our home values grow. If you make a decision this year that you’re going to buy a home, not sell your existing home when you purchase a new one, or if you decide to purchase an investment property, you are separating yourself from your peers, and the more you separate yourself the more stable your investment future becomes. Let’s make 2016 a year of prosperity and growth, and ditch the crabs in a bucket.

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About Jay Garvens

Standing at the intersection of our local real estate market and the nationwide financial industry, Jay Garvens gives you the complete picture of every story affecting today's mortgage market! From personal finances to the political decisions moving markets, tune in for a weekend dose of straight talk from Colorado's most candid mortgage industry commentator! Honest, unbiased, and always unpredictable, Jay explores every facet of today's mortgage industry with an approach that's refreshingly blunt and enormously entertaining!

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