Timing the housing market
Does anyone believe that you can really time the housing market? We know it is close to impossible to time the stock market. Are there any completly accurate indicators to show if the market will turn downward or up?
Interest rates have not proven to be an accurate measure.
Originally posted by "Pam Hudson":
Does anyone believe that you can really time the housing market? We know it is close to impossible to time the stock market. Are there any completly accurate indicators to show if the market will turn downward or up?Interest rates have not proven to be an accurate measure.
Pam, Interest rates just determine
1-how many people are re-financing, &
2-how much it's going 2 cost You 2 do whatever R/E investing U plan 2 do?
As 4 Your topic of "timing the housing market"
A civil war general had a simplre recipe for success:
"Get there First, with the Most"
In Real Estate....a similar philosophy prevails for success....
The secret 2 success is to find out where people want 2 go....& then get there 1st.
I'm in Florida...been ahead of the curve (mostly dumb luck) 4 the last 15 years myself.
the bottom line is that IF You don't GET in, Regardless of "Timing", even if the market goes thru "adjustments"....do You know of any property available, anywhere in America today for less than it sold for in 2000?
Less than 25% MORE than it sold for in 2000?
That, Pam, just worked out to a 5% ROI per year, as good or BETTER than a Jumbo CD at the bank? That's a "Worst Case Scenario"?
Buy a lot in a Development, preferrably as construction is BEGINNING....shop around, check out the deed restrictions, make sure it's what U would think about KEEPING & maybe even building there Yourself....
hold onto it until 2-3-4 houses are either completed or under construction....check out the price....if it hasn't doubled since there was "nothing", I'll buy You dinner (& buy that lot 4 5% over what U paid for it)
This isn't "rocket science", it's smarter, & Lord Knows, safer!
Get on the bus, or stay on the treadmill.....
as a T-Shirt I once saw put it
"If U ain't the Lead Dog, the View Never Changes"
i dont' really think you need to "time" the housing market... with the current boom in housing prices, if you own a property, you should do well (incase you want to sell it)
You can never time it, it has too many external factors involved. Just look for good deals and make them happen. :) In my humble opinion I think you can use market indicators to see trends but you might not know when the tide will turn. Also, there's always events like 9/11 that are unexpected and temporarily upset the economy as a whole. Who would have known we were going to be in Iraq even 6 months ahead of time? Who saw the tech market dropping like a stone before it happened?
Personally I think interest rates are a good indicator of where the markets going, especially after the boom we just experienced.
When interest rates rise, many people get forced out of their homes due to increased payments as a result of variable rate mortgages. When you get in to a house at a rock bottom mortgage rate, why would you want a variable rate? The only way the rate can go is UP!
Consequently you see more foreclosures and a lot more houses on the market.
Supply and demand: When there is a lot of supply on the market, the price typically goes down. Not good if you need to sell a house AND make money on it. It can be done, but it's not necessarily good to be priced over the local market when the market is going down.
So in essence, you may not be able to time the market, per se, but you can definitely have a good idea of which direction it's going in!
Just my opinion, of course.
-Grant
Timing the market down to the month or next 6 months to a year is extremely difficult to say the least. Our federal reserve, NAR, NAHB and just about every other large group attempts to do it. They spend a fortune on it. And sometimes they hit home and other times they just fail. One thing that is usually undisputable is that they all can predict a trend. They are all saying the trend is for a slowing market. Historically since post world war II the trends have lasted 7-10 years and when the government bodies started to suggest it the trend became an inevitable truth. We are entering a slowing season or have just entered one.
now you have to further determine if this will damage your investments. The good news is that even in the worst market over the past 60 years 63% of all properties had an appreciation to them in any given year. So we go from 95% of the properites appreciating to only 75% in the next year or so. That is still not bad. And if you plan to keep your property for 7 to 10 years you are almost guaranteed a healthy return. What other investment has such great security? I bet on real estate.
Michael Thespillzone.com (real estate forecasting site)