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 hopes 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 up, especially in recent days when we have seen a record pace of price increases, it seems that more people are getting involved in what is known as selling a property, which means, buying a house in particular, at a perceived price, opportunist price, and make some cosmetic changes, efficiently, and sell it, soon, 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 briefly attempt to consider, examine, review, and discuss 4 reasons most people shouldn’t try to market: time, real estate.
one. You cannot 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! Given that 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 turn the house around. !
two. 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; confidence! We have experienced an extended period of record low interest rates and corresponding mortgage terms! When this occurs, more people qualify for a mortgage, thereby increasing 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 emotions and therefore the perceptions of buyers and sellers! General consumer confidence influences the mindset of many people and that affects the market in general.
3. The different factors do not 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 increase and/or decrease home prices, may often not align, and thus overall trends become more difficult to predict.
Four. Relationship between home sellers and qualified prospective 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!