Baron Rothschild, an 18th-century British nobleman and member of the Rothschild banking family, is credited with saying that “the time to buy is when there’s blood in the streets.”

He should know. Rothschild made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. But that’s not the whole story. The original quote is believed to be “Buy when there’s blood in the streets, even if the blood is your own.” This is ‘contrarian’ investing at its heart–the strongly held belief that the worse things seem in the market, the better the opportunities are for profit. Most people only want winners in their portfolios, but as Warren Buffett warned, “You pay a very high price if everyone agrees with your investment decision, it’s probably not a good one”.

Contrarians, as the name implied, try to do the opposite of the crowd. They get excited when a good trend has a sharp but undeserved drop in value. They swim against the current and assume the real estate market is usually wrong at both extreme lows and highs. The more the prices swing, the more misguided they believe that the rest of the market to be. What’s happening today in the real estate marketplace is a repeat of the 2007 crash that lasted almost 10 years. Extreme optimism for the preceding 4 years that then fell off the track.

For Todays Buyers:
If you buy foolishly today, the inflated price may cause you to have to take a deep discount when you’re ready to sell. Or even lose the property all together through foreclosure. Our point being, “When there is blood in the street it’s time to buy not sell.”

For Todays Sellers:
Some of you are waiting for a higher eutopia. We passed that a long time ago. Prices have screamed ahead like a bullet-train without breaks. In 2020 when homes that were selling for $300k are now at $900k. Land on Whitefish Lake that was sold in 2007 for $10k per lakefront lineal foot is now at $60k per lakefront lineal foot. We can go right down the list with many more examples but our point being, “When there is blood in the street, it may be too late to sell.”

When you’re ready to consider a change, allow 5 Star Realty to help you negotiate through the current real estate maze of buying and selling.