Frankly, the #1 questions I get are market timing questions like: “Have we hit bottom?” and “Is NOW the time to buy?” Well, after months of thinking and market analysis I’ve discovered the EXACT time you should buy, down to the DAY!
So you no longer believe the “Buy Now!” campaign from the National Association of Realtors. Especially since The New York Times quotes the former Chief Economist David Lereah as acknowledging he had gotten it wrong. Also you no longer hear the office water cooler chat: “Historically with a 7% annual appreciation, you can’t go wrong” or “stop throwing money out the window” (see my “Don’t Buy, Ask Why” video/blog).
The market has been dropping over the last two years. Poorly, I mean “badly” (especially condos). In the newish building where I live (Clarendon 1021, an Arlington Condo in Virginia), one particular unit went from $585,000 starting price, up to $670,000, and then down to $530,000 in a pre-foreclosure last month. A lugubrious $140,000 swing! So it would make sense that people would ask me “is this the bottom, should I buy now?” and today’s “So there are some real deals out there?”
I can understand the fear that a prospective home buyer has in this marketplace. Nobody wants to be made the fool that bought at the top. Even knowing that they got the place for $50k or $100k better than a topper (a made up word for somebody that bought at the top), isn’t good enough. They want the exact inflection point. They want to be the braggart of the officeplace in a year or two when they are “rich.”
I call these people Market Timers.
Enough already? When EXACTLY is the right time to buy…?
The day, as in the exact day is… the day you stop caring about the bottom of the market and you decide you are ready to live in a place for 5-10+ years and enjoy life.
I’m serious. It might sound like a convenient way for yet another Realtor to make “now” always the best time to buy, but show me one other blog that will also tell you that the economics of buying are still WAY off, and might be for many years to come. The economics of renting are still far far better than buying, even after the tax advantages.
I’ve always maintained that your house should be #1 about enjoying life and all the “warm and fuzzies” that come with home ownership, and maybe #4 can be about investment. Those that try to make them both #1 will have an analysis paralysis situation.
Nobody knows what the market will do (see Stockbrokers Can’t Predict Stocks, Realtors Can’t Either!), so quit trying to be Nostradamus (or expecting me to be one), and go out there (when YOU are ready) and try and get the best price possible and enjoy!
My next article will be about Pre-foreclosures, short sales and bank owned properties. If you like what you are hearing, make sure you sign up for this blog via Feedblitz on the right side.
– Written by Frank Borges LL0SA- Broker FranklyRealty.com
p.s. Typos, please report them to me.
p.s.s. For those that really wanted some “timing,” all I can say is December is when there are the fewest # of buyers, and you might get another 1-3% off. Come Jan 2nd there is a FLOOD** of new buyers that have put the holiday stresses behind them, and are eager to buy. The problem with waiting until Dec is the inventory and your options are the lowest.
Correction: A commenter called me out on the use of “FLOOD”, that was probably too strong of a word. I ran the numbers and actually January had 40% more under contracts than November and only 20% more than December for 22201. So maybe I should have said a “smidgen more.” See comments for more details.