And that word is simply "Risk!"
For the past decade it's obvious that this simple and meaningful
word was either forgotten, or at best, blatantly ignored.
All real estate, everywhere, contains some degree of potential "risk."
Yet the pie-in-the sky-attitude in the industry, that real estate prices would always climb higher and higher, made all types investments appear safe and sound. They were suppose to be "risk free."
Once again, time has proved that this was a major classical error, and on a nation-wide scale.
A brief definition of risk is the " degree of probability of loss." Risk simply means that a negative event will occur, over time, creating a sequence of events or factors, that will cause the "value" of an investment to erode or decline even below what was paid for the former asset.
Years ago bankers and financial institutions were always the best gatekeepers of " risk analysis," as they did not want to place their assets ( mortgages) in peril.
Individuals who purchased homes very close to a river, known to flood in the past, were taking a major risk of flooding, and thus loss.
Let us all hope that the word "risk" will regain it proper position in the entire real estate industry.
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