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You are under complicating it. There is nothing inherently wrong with buying on an upswing, or a downswing for that matter. It all depends on WHERE on the upswing or downswing you buy. That, combined with the length of time you plan on owning the property is what will make or break you. The shorter you intend to own the property, the more important it is to time the market correctly
That's incorrect. If you have bought in 1994, held for 10 years (10 years is above average) and sold in 2004, chances are you made 100% profit or more. If you have bought in 2004 held for 10 years and sold today chances are you made no profit, perhaps you lost because of agent commission.
You can't time the market all the time but you know when prices are high. Prices are high when rates are low and still people struggle to maintain their homes. The only reason the market has not collapsed it's because of the fed intervention. For several years there have been and will be no income or job growth even for the westfield crowd which is in the 99%.
Anesthesia...of course housing is a local phenomenon. But NJ is the most densely populated state in the country and we are facing 15 years of baby boomer selling going fwd. Combine with the USA going broke, NJ going broke WITH taxes rising to $8k on avg for a box, the Fed printing Trillions to desperaty perpetuate a debt ponzi economy and well....people have to be certifiably insane to overpay for a house. And anything more than last year is overpaying, period. A harsh winter creates supply issues and suddenly houses are worth more than last year?! Puhleeze.
As for buying in an upcycle...bzzzzzt. You INVEST in usury on an upswing. You incur debt when prices are LOW nominally speaking.
The first paragraph: I have been hearing that same exact stuff my whole life, yet prices are still up. Also, you are arguing both sides of the argument with yourself. Printing trillions, raising taxes, etc only leads to higher NOMINAL prices down the road. Not lower.
How much experience do you have buying and selling properties? In the long term, buying on the upswing and downswing makes absolutely no difference. If you could somehow predict the top or the bottom, now THAT would be a neat trick, and you could certainly become rich if you had that ability. If you buy a house for $500,000 on a downswing, it is the same as buying for $500,000 on an upswing if you are keeping the house for 30 years and it is worth $1,000,000 at the end of the 30 years. Or even if you keep it 10 years and it is worth, say $600,000 at the end of the 10 years. What if you buy at $500,000 on an upswing vs $550,000 on the downswing? If the house sells for the same end price, the upswing price is better. Upswings and downswings don't matter, only end prices.
That's incorrect. If you have bought in 1994, held for 10 years (10 years is above average) and sold in 2004, chances are you made 100% profit or more. If you have bought in 2004 held for 10 years and sold today chances are you made no profit, perhaps you lost because of agent commission.
You can't time the market all the time but you know when prices are high. Prices are high when rates are low and still people struggle to maintain their homes. The only reason the market has not collapsed it's because of the fed intervention. For several years there have been and will be no income or job growth even for the westfield crowd which is in the 99%.
Then there are plenty of people who bought in 2004 and made a very large profit in 2014. As I said, it is multifactorial. Local markets make all the difference. You can't make blanket statements. I wish I bought an apartment in Manhattan in 2004, and even then, it depends on the exact neighborhood.
Then there are plenty of people who bought in 2004 and made a very large profit in 2014. As I said, it is multifactorial. Local markets make all the difference. You can't make blanket statements. I wish I bought an apartment in Manhattan in 2004.
You did not understand. The point is that in the first 10 year period 1994-2004 you would have made much more money than in the second 10 year period 2004-20014. Manhattan or NJ. So when you buy is the most important determinant of future returns. Same in stocks. This is elementary.
the problem with trying to time the housing market is that generally you are looking for a house based on life circumstances not based on investment opportunities. also, like other investments, its not so simple to know when you have hit the tops and bottoms of the market or how long the trends will last. its hard to make your home choice based on waiting for an upward trend to end, peak and then drop for you to buy.
I don't look at my house as an investment. its a place to live for me and if the value goes up wonderful if not no biggie. I am not counting on that money for anything. since I am expecting 1 more step up in home in my life, it serves me better if my house goes down a lot in value, assuming whatever I purchase drops along with it.
You did not understand. The point is that in the first 10 year period 1994-2004 you would have made much more money than in the second 10 year period 2004-20014. Manhattan or NJ. So when you buy is the most important determinant of future returns. Same in stocks. This is elementary.
I'm not so sure we are saying different things here.
How much difference would it make if you bought in 1984 and sold now? Or 1954? Or 1854?
I am not so sure we are at a peak now. I have bought and sold properties over the years, and the only thing I am sure about is the inability of anyone to accurately predict the top or bottom of a market. Especially a local one.
I'm not so sure we are saying different things here.
How much difference would it make if you bought in 1984 and sold now? Or 1954? Or 1854?
I am not so sure we are at a peak now. I have bought and sold properties, and the only thing I am sure about is the inability of anyone to accurately predict the top or bottom of a market. Especially a local one.
Many people decided to not buy in 2005-2007 as it was evident the market was bubbly. Also now prices are high because of the economy state. If it does not improve, wages do not inflate, taxes go up, and rates go higher there is no way prices are not going down. Especially with boomers retiring. A person who buys and sells real estate does not care to time the market frequent transactions result in cost averaging. But for people who buy every ten years very important. I agree though that bottom and top cannot be accurately predicted but you may know when you are reasonably close.
Incidentally let me tell you that me and you are paying the people who were buying during the bubble. And if the fed is printing billions it was exactly because of the bubble. Are you telling us that it does not matter?
Many predicted that bailing out the banks will result in moral hazard and people over speculating. Here it is!
the problem with trying to time the housing market is that generally you are looking for a house based on life circumstances not based on investment opportunities. also, like other investments, its not so simple to know when you have hit the tops and bottoms of the market or how long the trends will last. its hard to make your home choice based on waiting for an upward trend to end, peak and then drop for you to buy.
I don't look at my house as an investment. its a place to live for me and if the value goes up wonderful if not no biggie. I am not counting on that money for anything. since I am expecting 1 more step up in home in my life, it serves me better if my house goes down a lot in value, assuming whatever I purchase drops along with it.
No biggie? for many people this is the biggest and (many times) only investment. People retire from the money they get from selling their last house. It is not always possible to time the market or base your life on it but many times you can and you should.
Incidentally let me tell you that me and you are paying the people who were buying during the bubble. And if the fed is printing billions it was exactly because of the bubble. Are you telling us that it does not matter?
Many predicted that bailing out the banks will result in moral hazard and people over speculating. Here it is!
Many people decided to not buy in 2005-2007 as it was evident the market was bubbly. Also now prices are high because of the economy state. If it does not improve, wages do not inflate, taxes go up, and rates go higher there is no way prices are not going down. Especially with boomers retiring. A person who buys and sells real estate does not care to time the market frequent transactions result in cost averaging. But for people who buy every ten years very important. I agree though that bottom and top cannot be accurately predicted but you may know when you are reasonably close.
Incidentally let me tell you that me and you are paying the people who were buying during the bubble. And if the fed is printing billions it was exactly because of the bubble. Are you telling us that it does not matter?
Many predicted that bailing out the banks will result in moral hazard and people over speculating. Here it is!
You are telling me things that really should be "a given" in an intelligent discussion about the real estate market. Of course they are printing in response to the bubble. They can't let prices drop too far. For every dollar a home depreciates, more buyers walk away from their mortgage obligation lending to a viscious cycle that causes home depreciation even further until the entire housing market is in the abyss. They print money to devalue the dollar to the point where whatever you bought your home for does not seem like so much money any more. Then prices rise again. That was my own oversimplified version (lower interest rates factor in there somewhere too, as well as a whole host of other things I don't want to get into right now)
And people didn't just PREDICT moral hazzard. What they did was the textbook definition of moral hazzard.
When discussing economics I try not to get caught up in right vs wrong. I just stick to what is and isn't, not what should be. That just clouds your judgement. I save that for political discussions.
No biggie? for many people this is the biggest and (many times) only investment. People retire from the money they get from selling their last house. It is not always possible to time the market or base your life on it but many times you can and you should.
Incidentally let me tell you that me and you are paying the people who were buying during the bubble. And if the fed is printing billions it was exactly because of the bubble. Are you telling us that it does not matter?
Many predicted that bailing out the banks will result in moral hazard and people over speculating. Here it is!
its no biggie for me. a big part of why it is a biggie for people is because they invest too much of their income into real estate. but anyway, yeah its great for it to go up in value and its great to be able to time the market. all that is much easier said than done.
incidentally, that's politics and im not gonna get into it. my politics don't impact my financial decisions.
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