4 Reasons Why You Shouldn’t Try To Market – Time Real Estate!

In almost every area of ​​finance, it seems, some people are looking to try to proceed, with a higher edge, in the hope of timing the specific component, in order to hopefully buy – low and sell – high! We often witness this behavior, regarding the buying and selling of real estate, especially residential transactions! When prices seem to be trending higher, especially in recent days when we have seen a record pace of price increases, more people seem to get involved in what is known as selling a property, which means buying a particular house, at a perceived price, opportunist price, and make some cosmetic changes, efficiently, and sell it, pronto, at a profit! After more than 15 years as a licensed real estate seller in New York State, I have seen this process succeed and considerably less so! With that in mind, this article will attempt to briefly consider, examine, review, and discuss 4 reasons why most people shouldn’t try to trade: time, real estate.

1. You can’t predict the future, consistently and/or accurately!: if we had a Crystal ball, perhaps, we would be better able to predict the future accurately and consistently, even in relation to house prices! Since these prices have historically tended to be cyclical, it is challenging to know when this might make sense. Obviously, every financial strategy/action must be considered, on a risk/reward basis, and only those who are ready, willing, and able to handle the uncertainties, stress, and potential losses should attempt to trade!

2. Several (not just one) factors affect real estate, including price: No single factor determines how prices will move! Some of the factors include: interest rates (including mortgage rates and terms, etc.); Offer and demand; seller and buyer perceptions; trust! We have experienced, for an extended period, record low interest rates and corresponding mortgage terms! When this happens, more people qualify for a mortgage, thus increasing the demand. Perhaps the most important factor is supply and demand, and when supply is less than demand, prices go up! One factor is based on the emotions and therefore the perceptions of buyers and sellers! General consumer confidence influences the mindset of many people and that affects the market as a whole.

3. Different factors don’t always work, in tune!: When mortgages are easier and cheaper to obtain, prices tend to go up! When confidence is high and inventory is low, it usually causes an uptrend. However, those factors, which tend to drive house prices up and/or down, often may not align and therefore overall trends become more difficult to predict.

4. Ratio of Home Sellers to Potential Qualified Home Buyers: In general, when demand is high, there are more qualified potential buyers than there are homes for sale (inventory). The opposite set of conditions usually creates a so-called Buyers’ Market. Sometimes, we witness a neutral set of conditions!

For most, trying to trade – time, real estate – is speculative and risky! As with any other financial asset, proceed with an open mind and in a well-considered manner!