The Million Dollar Question!

Timing the Market
I hear many buyers say, "I want to wait until the market hits bottom before I buy." My question is, "At what point do you know exactly when a market has hit bottom?" When it starts to go back UP is the answer. That's the mistake most uneducated buyers make for any market - housing, stocks, etc. Most uneducated stock buyers who want to be investors try this strategy. They wait to buy until it "bottoms out" and as the stock is dropping suddenly it turns and starts to go up again - they panic and buy. Then they want to wait until it "peaks" to sell. They watch and watch, up and down. Then down, then down some more, then the thought "Ok I think it peaked - I'll sell." Don't make much money that way.

The only way to know a market has bottomed out is when it starts to rise again over a sustained amount of time. Given the slowness of real estate vs. stocks it's much more dangerous to try this game in real estate. The reports you'll see about the real estate market for September 2008 will be out around October 15th. Those reports are based on closings in August, which are based on contracts written in June or July, which are based on buyers looking at houses in May or June, which were priced based on houses sold between December 07 and May 08. Can you see where I'm going with this? By the time your newspaper tells you the market has started to increase, it will have really started 3-5 months ago and you still need 1-2 months of looking and escrow. That's if you first catch the article then jump in with your agent and start right away. You'll have missed the best price.

You can't time a housing market. It isn't possible or smart. Real estate is the best long term investment in the history of our country. If you buy and stay (without refinancing) for a minimum of 7-10 years history shows you will always sell for higher than you bought so don't worry and go get a great deal out there.