You’re a would be home buyer and you’re wondering about timing the housing market when that market is showing signs of slowing.  This begs the question, can you as a buyer, time the real estate market?  The answer is yes but that doesn’t mean what you think.  It’s not timing the bottom.  What then exactly do I then mean by yes you can time the market?  Let me explain…

If you are a buyer today and you want to buy your family home, timing means by as soon as you find a home you love.  That’s timing, that’s your timing and if you’ve ever planned for a big life change you know, timing is everything (if this is the right time for you, check out listings in your area here).  If you want to get in for the kids before school starts, that’s timing too.  It’s timing subject to a set of priorities you’ve assembled.  Same is true if your career has certain times of year that may be slower, when you have a little more time to move.  For me that is fall because spring is always crazy in my business and I couldn’t imagine trying to move in spring.  For my insurance buddy that’s spring because the last part and first part of every year is open enrollment and renewal.  For my accountant that’s May-June, after tax season and after a much needed vacation.  Perhaps you have been looking in spring and felt that everything nice was disappearing.  There were multiple offers and prices seemed to be running away from you so you decide to hold off until fall.  That’s timing of a different sort too, that’s timing the seasonality of the housing market.

OK, that’s not what you mean when you refer to timing.  You were thinking about timing the bottom or timing the decline.  Jumping in at the exact moment that you can buy at the lowest price, to gain the lowest payment and obtain the greatest return on investment.  If you are a buyer and the market is soft for the first time in 6 years and you can negotiate a little better deal, that’s timing.  That’s timing the market and that’s what you should be looking at doing now.  Don’t misunderstand, I’m not suggesting like all the investors on CNBC do that “You should buy now, buy now!”  I hate it when I hear that because what do you expect them to say?  Don’t buy?  They never do.  Same can be said for a Realtor, but when you are in the market for a home and you know that sales are slowing it’s important to realize that while you may not be at or even near bottom, a home is so much more than an investment.  If you can find a home you love and you know that the price is softer now than it was just a few months ago, write your offer. Write a lower offer.  Test that seller.  How motivated are they?  Do they really want to sell today or are they willing to wait?  This is especially true if that home has been on the market a while and the seller has already had a couple price reductions.

Prices typically rebound in the spring, but maybe this year they don’t or maybe they do.  This timing thing swings both ways for buyers and sellers.

My point is this.  If you find the right home (click here to search for homes ), can get it at an improved price from a few months ago, buy it.  Even if prices go down some more, so what?  It’s you home and when you are looking at buying your home, you don’t pass on your Shangri La over a fist full of dollars.  So long as you feel confident in your employment and you’ve assessed your ability to repay the loan that you’ll undoubtedly be taking out, don’t worry about the possibility that there could have been an extra $10,000 or even $30,000 that you might be able to save.  This is a few hundred dollars a month if it were to drop that additional amount.  If…  Right now, there are signs the market is correcting.  The headwinds of rate hikes, lack of wage growth and a potential slowdown in the global economy is putting pressure on prices.  Some sellers are still pricing their homes like the market is going up.  For most of these sellers, they’re in for a rude awakening and your low offer after they’ve languished a few months is that wake up call.  As a buyer you should be watching and lying in wait.  You’re getting the opportunity that many buyers only 6 months ago, longed for.  Don’t lose the home that you wanted, if and when it comes available.  Timing the market bottom is a sucker’s bet.  Sure, you might wait another year and the market corrects substantially, anything’s possible.  Equally possible is that rates continue to rise in the face of a declining Fed balance sheet and ever increasing government spending and borrowing.  In the absence of substantial wage inflation, your buying power actually decreases even with a marginal decline in property value.  For each percent of interest rise, a property has to decline roughly 10% in value for your buying power to remain neutral.  The reality however is that a perpetual shortage of supply in the face of a generational cycle of increasing demand as Millennials age into buyers, means any decline or correction is likely to be measured.

So timing the market?  Heck yeah, you can time it but don’t confuse timing the market with timing the bottom. If you have questions or would like to know if it’s the right time for you, give me a call 805.427.3008 or contact me.

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