Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

This is an excerpt from an opinion piece by Warren E. Buffett printed in The New York Times on October 16th, 2008.  He is not talking about Edmonton real estate; he is specifically talking about the turmoil in American equities.  This turmoil is, however, an instigator of confusion for owners and investors in Edmonton real estate right now.  The principles he reveals in the article, the ones which influence his personal investing decisions, are directly applicable to our situation here in Edmonton.  

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors.

I am witnessing a decline in confidence in Edmonton’s market among my clients.  More people are leasing when they would rather purchase, and I’m seeing end-users losing their money partners to a “wait and see” attitude.  I believe it is caused more by fear, and newspaper-selling headlines than actual market data - like this recent report which finds Edmonton real estate currently 8% undervalued. 

As Warren Buffett has already pointed out, government reactions to the current situations will likely prove inflationary.  I hope your investments prove to be too, and I think Edmonton real estate is a vehicle that will rise with the tide.  One more Buffett quote:

If you wait for the robins, spring will be over.