Mood of the Market
These are the folks I remind that they certainly would not have sent the bank a share of their upside on their home in the years they were ahead as a way of illustrating the irrationality of bailing at the slightest downward fluctuation of their home.
When I first began training as a real estate broker, I was taught to explain the pricing guidance provided by recent comparable sales to home sellers by pointing out that list prices are the realm of sellers' fantasies, while actual sales prices map out the boundaries of reality.
One village within that domain of real estate fantasy, most of us now realize, is the town of It-Only-Goes-Up, which is just down the road from All-Wins-No-Losses. Maybe, after the bubble burst, then completely imploded, we're all ready to accept the upshot of professor Statman's exploration of the fantastical enterprise of looking only for wins, and never expecting losses, in our investments and our real estate dealings: don't.
Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.
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