All good real estate investors know that buying an investment property is about the numbers—emotions need to be kept out of the deal.
But have you seen the doom-and-gloom headlines in the news lately? “6.7 Trillion lost from Global Equities value since late September,” “Canadian real estate sales make largest September decline since 2007,” and “Sales of detached homes in Calgary at their lowest since the 1990’s.” These headlines are all examples of Sensationalism, defined as “the use of exciting or shocking stories or language at the expense of accuracy, in order to provoke public interest or excitement.” (Google dictionary). Even though most of us know that the media uses sensationalism to sell advertising (print or A-V media), we are still vulnerable to “the scary news.” Our brains are simply programmed to respond with emotion when a threat or crisis appears on the horizon (remember that fight or flight or freeze response?).
As an investor, how do you separate the emotions of the media headlines, from the facts that lie somewhere underneath? We like to get as close the facts, numbers and data as possible. That means searching the source of any research or information—not just reacting to the headlines. Bank economists are not known for sugar-coating anything—ever; so when Scotiabank puts out a report forecasting Alberta to have employment gains and lead Canada’s economic growth over the next 3 years, then we listen. Or when ATB studies the payroll data from Stats Canada, we are paying attention: Alberta’s weekly earnings were up 2.9% year over year, and continue to be the highest in the country. Now, when does the media report that good news? Another example is Stats Canada reporting that Alberta vacancies (real jobs that are not yet filled by an employee) are up 17.7% in Q2—wait, what?; but that news can only be found buried deep in the business section.
Is it all roses, rainbows and unicorns? No, of course not. If you need to sell your house in Calgary today, it is incredibly difficult. We encourage all of our investor friends and colleagues to gather as much information as possible, before being manipulated by the sensational headlines. Oh yes, and listen carefully for the opportunities!
