While there may be certain periods of time, when one, might find a better opportunity, than another, in terms of buying or selling real estate, it is rarely a good idea, to try to apply the principles of market – timing, to this endeavor. There are so many factors, which might impact pricing, some more obvious and/ or predictable, while others more dependent on less predictable current events, etc. While human nature, is such, we all like to find a bargain, the actual fact, is, doing this, has certain risks and uncertainties, and other factors, involved. With that in mind, this article will attempt to briefly examine, consider, review, and discuss, some reasons, market – timing, is challenging, and often unwise.
1. Are you selling one house, and buying another?: If you are, as many do, when you sell the first home at a higher price, the new home, will also cost more. Therefore, how might market – timing make a difference?
2. Mortgage interest rates: So many factors affect interest rates, and the effect of rising interest rates, generally raises the rate one pays monthly, for mortgage expenses. Every increase in rate, means someone may not qualify for the same amount of loan, and will pay, more, every month, for every dollar borrowed.
3. All real estate is local: Market conditions change from region to region, and, in some cases, from neighborhood, to neighborhood (even when nearby). The adage, All real estate is local, explains, how conditions vary, depending on location, and since factors, such as supply and demand, pricing, schools, safety, conditions, etc, should also show you, why it is not only challenging, but often, ill – advised, to proceed, that way!
4. World and domestic changes/ conditions: When events in Washington concern financial markets, we sometimes witness increases in interest rates, real estate value, etc, which go beyond, logic, but are often based on emotional factors. In addition, unrest in areas, in the rest of the world, trade wars, and restrictions, etc, have an often – unanticipated result!
5. Supply and demand: The economic law of Supply and Demand, states, when supply is high, or demand is low, prices drop, and when they are the opposite, we witness rising prices. What causes certain changes in market inventory, and when this might change (often, somewhat, suddenly, and not expected), makes market – timing, considerably challenging!
A simple rule should be, to know your needs, goals, priorities, reasons, and personal finances, consider mortgage rates, etc, and, if you find the right house, for you, at a fair price (based on local market), try to buy it. Will you have the discipline to do, what’s best for you?