HoweEnterprise.com
May 18, 2020
Is now the time to invest in real estate? Hi Taylor - I’m wondering how this pandemic and the shutdown might affect real estate. Is it still Taylor a solid investment Kovar strategy, or should I stay away for a while? Stan Hey Stan - This is a great question as it’s pretty likely there will be some impact on real estate, but it’s not clear how hard we’re going to feel it. Unlike the 2008 crisis, our current economic woes aren’t tied directly to the housing market. Instead, buyers and renters will have to adjust to other factors that influence their bottom line. Low interest rates. Rates were low before the pandemic shut everything down, then they were absurdly low, and now we’re bouncing between pretty low and very low. That’s a convoluted way of saying that it’s a solid time to refinance your mortgage. If you were already looking to buy a property, even if the price hasn’t dropped, you might be able to get loan terms that wouldn’t have been available a few months back. It’s a bit of a conundrum as the lowered rates won’t do much, if anything, to alleviate the jobless crunch, but it does make it easier for those with means to buy property. Tentative buyers. Even with the awesome rates, it’s understandable that the number of interested buyers has dropped. There are plenty of reasons to be hesitant, among them are job security and an expectancy that market prices will go down. Since nothing is guaranteed, I don’t think anyone should hold off on buying a house they can currently afford. The lack of competitive buyers might be more in your favor than a drop in market value. However, with unemployment on the rise and industries still shut
down, it’s hard to imagine that real estate sales and prices won’t take a dip in the coming months. Renting market. This might be the area of most concern, because what happens to the renters market usually has an impact on all sectors. As waiters, bartenders, part-time students, retail staff, personal trainers, hospitality workers and so many more look for new jobs or start taking unemployment, we can expect to see a lot of apartments and rental properties become available. These vacancies would typically be filled by other members of the working class, but those prospective tenants are in the same boat as the ones giving up their leases. The domino effect of people losing their jobs and moving out of their apartments won’t take too long to reach the real estate market, since renters and buyers don’t have too many degrees of separation. We don’t know how deeply we’ll feel this economic downturn, or how long it will last. From a real estate perspective, it’s good that the crisis isn’t directly tied to housing, but it would be naive to think the market will go untouched by this pandemic. Thanks for the question, Stan, and I hope your investing plans work out! Legal Disclaimer: Information presented is for educational purposes only and is not an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. To submit a question to be answered in this column, please send it via email to Question@GoFarWithKovar.com or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.
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Living with children Psychologist B. F. Skinner, the formulator of behavior modification theory, was attempting to prove that the John same principles Rosemond that govern the behavior of amoeba, planaria, rats, dogs, and monkeys also govern the behavior of human beings. A very Darwinian proposition, indeed. What my graduate school professors conveniently “forgot” to tell me: Skinner failed to prove his hypothesis, and no researcher has ever succeeded where Skinner did not. Some have claimed success, but all they’ve succeeded at proving, really, is the fact that human beings are economists by nature. From a very early age, humans weight benefits versus costs and make logical decisions, if not always rational ones. Dogs are not economists. Behavior modification strategies – manipulations of reward and punishment – compel the behavior of a dog. Their outcomes are predictable. But behavior modification outcomes are not at all reliably predictable in a human, even an infant. Researchers have found that when the subject is human, rewards and punishments have paradoxical effects at times. Rewards can lessen desired behavior and punishment can increase undesired behavior. Significant numbers of parents have discovered the same paradox, albeit most of them don’t understand what it is they’re seeing. Put a 15-month-old child in two minutes of time out every time he goes after one of his mother’s set of limited-edition porcelain figurines and watch as his determination to obtain the figurines increases. Praise and continue to praise a 4-year-old child for making an attempt to draw a horse and watch him stop drawing horses. In both cases, economics is at work.
In the case of the toddler, two minutes in a chair doesn’t begin to outweigh the thrill of the chase. The more time outs, the more of a challenge those figurines become. The 4-year-old stops drawing horses because he figures out, intuitively, that any old horse is good enough to send his mother into clapping spasms, high-fives, and “woo-woos!” That wears thin quickly. To work, punishments must outweigh a child’s determination to win, to prove that no one can tell him what to do. To win over the little rebel/economist, the cost of misbehaving must be significantly greater than the benefit and believe me when I say that rebellion is its own benefit. It scratches a persistent itch. The parental goal should be to punish infrequently, but when punishment is necessary, to do so in ways that establish permanent memories. Time out is the least memorable of all punishments, by the way. It’s merely annoying. To be motivating, rewards must be dispensed conservatively. The more “everyday” they are, the less meaningful they become. The value of a reward is inverse to its frequency. The scarcity of praise forces a child to self-reward, which characterizes all high achievers. As I will forever maintain, childrearing is not complicated; it’s almost completely a matter of commonsense. Unfortunately, for going on fifty years now, American parents have been listening to professional “parenting” types who have made it seem complicated and anything but commonsensical. Family psychologist John Rosemond: johnrosemond.com, p arentguru.com. John Rosemond has worked with families, children, and parents since 1971 in the field of family psychology. In 1971, John earned his masters in psychology from Western Illinois University and was elected to the Phi Kappa Phi National Honor Society.
