Go Chicken Little Go!

So what do we do now that the sky has finally fallen?

Work hard? Work differently? Keep going like we always have? One item I can confidently advise - save your cash. For one, you may need it. You may lose your job for circumstances beyond your control, and be caught with no income for a while. Two, if you don't lose your job, without cash you will lose some opportunities that have begun to pop up, and will continue to surface over at least the next year.

For example, in my lovely Charles Village neighborhood, there is currently a very large, 3 story, zoned for 3 units, right on a prime Saint Paul block, but does need some work, home for sale. It's been on the market for about 25 days, and sold a year ago for $410,000. Since then its been foreclosed on, and now the bank is trying to sell it for $299,000, and guess what, nobody's buying. I even looked at it.

The problem is the price. It's too high. Hello out there, the sky fell, didn't you see it? Apparently everyone else has.

There are other good "REO" deals right in my neighborhood (REO stands for Real Estate Owned, as in, real estate owned by a bank), and nobody is buying those either. The agents are practically begging buyers to come and take a look.

And it's not only real estate where I expect to see deals to be had over the next twelve months. I would look out for deals on all types of big ticket consumer goods, like cars, appliances, big screen televisions, and pool tables because all the fun expensive stuff will go on sale. It's sad, but ebay and craigslist will also see increased traffic, as people start to sell the big ticket consumer goods they bought when everyone else did, and now they're broke, just like everybody else. If you've got the cash, you'll get the deal.

This isn't only because the stock market is in the tank, or because of the increased difficultly in obtaining financing. These properties are sitting on the market because people are scared. They are scared of the uncertainty that lies ahead. They are scared of $5 gallons of gas, and $6 gallons of milk.

But I don't think the sky falling is anything to be afraid of. In fact, I think it is something to welcome. Go ahead, exhale, the party is taking a break. Now's the time to run to the bar and grab a drink, while the line is short, and if you have to go, go to the bathroom now, because pretty soon everybody will be back and you'll never get in!

Remember the last time the sky fell? The last time the party took a breather? It started in the very beginning of 2000, the Nasdaq bubble? Remember? Funny how the world has such a short memory.

I've said it before and so have many others: Get greedy when everyone else is scared.