17 October 2008
Up Markets and Down Markets, When to Buy and Sell. (Part 1)
Posted by Ryan Coffey under: Buying; Financial; Selling; When to Buy and Sell .
This is the first of a six part series. Keep an eye on this blog for the rest.
Here’s a question that I’m sure is on the minds of many people in any market:
Q: When should I buy a home?
A: When you can afford to make the payments.
But people tend to have trouble accepting things that are simple. They tend to have the notion that things need to be complicated in order to work, so they often confuse themselves with their own combination of logic and ‘just enough information to be dangerous’.
The rest of this post is for those of you who like things complicated.
This short and convenient answer is simplistic, yes, but when you look at all the details that I outline below and in the following post(s), you’ll see why I summarize them this way.
And before I go any further, let me say what I so often say on this blog, that this is written for people who are looking to buy themselves a home, not flip houses, not make money off of rental properties, not building new construction to sell and so on. Deciding when and where to do those things actually are as complicated as people perceive them to be. Buying a home is not the same, and although there are cases where market does affect when it’s a good decision to buy or sell, for most people in most markets it’s not as big of a deal as most people make it out to be. In daily life I find that so many people are overly concerned about whether the real estate market is going up or down.
I don’t expect or want you to take my word for any of the following. I want you to do your own research if you are skeptical. And many will be skeptical because I obviously have something to sell, and I can’t blame people for feeling that way as roles reversed I would too. But for goodness sake don’t use the newspapers, magazines or TV news for your research they mostly sell fear and sensationalism. You need to look at stats and data about what’s selling and has been selling for how much and how it’s sold. There’s no spin on that. I’m all about transparency. Reading this series of posts will at least give you some good starting points to inform yourself with which to my chagrin, the mainstream media fails to.
Now for the first objection to my Q & A above:
“But, the market is going down. Shouldn’t I wait until things start going up again?”
Well, that would depend on how long you think you’re going to live there. In any market, including the recent boom, buying a place and not waiting long enough to sell it will cost you $ as selling a home has fees and taxes associated with it.
I say this all the time because it’s true: Prices always go up in the long term. If you hold on to it long enough the value in your home the value in your home is expected to increase. The ups and downs are a short term phenomenon. The only question is, how long such and such trend will last.
I recently got my hands on an MS Excel file that is a graph of the average sale prices in Vancouver dating back to 1977. It confirms what I say. In that graph, you can see that from any point to any other point no more than 7 or 8 years later, the average price has gone up and then gone higher. If you want to see this graph, go to my website , email me via the contact page and I’ll send it to you. If you are from another area, ask your local Realtor if they have a similar graph of your local market.
There’s no consistent answer on when what will happen, every expert will have a slightly different opinion so I can’t tell you with certainty which person to listen to. However, if you believe any particular individual knows for sure what the future holds, I have a bridge to sell you for really cheap. (Maybe as a Realtor I shouldn’t make that joke…)
More objections and info to come soon…
One Comment so far...
Market Update | Move To Nanaimo Says:
18 September 2009 at 7:56 pm.
[...] you can afford to make the payments on what you buy. For more info read my six art series on “When to buy and Sell”. The following info may make some difference to the homeowner, but it is more for those who want to [...]