Time in the Market Beats Timing the Market
Timing the Market – Is it Possible?
Does it make more sense to buy a home now or wait? There’s a lot to consider, from what’s happening in the market to your changing needs. But generally speaking, timing the market isn’t a good strategy – there are too many factors at play for that to even be possible.
That’s why experts usually say time in the market is better than timing the market.
In other words, if you want to buy a home and you’re able to make the numbers work, doing it sooner rather than later is usually worth it. Bankrate explains why:
“No matter which way the real estate market is leaning, though, buying now means you can start building equity immediately.”
Benefits of Buying Now vs. Later
Here’s some data to break this down so you can really see the benefit of buying now versus later. Each quarter, Fannie Mae releases the Home Price Expectations Survey. It asks over one hundred economists, real estate experts, and investment and market strategists what they forecast for home prices over the next five years. In the latest release, experts are projecting home prices will continue to rise through at least 2029 – just at a slower, more normal pace than they did over the past few years (see the graph below):
But what does that really mean for you? To give these numbers context, the graph below uses a typical home value to show how it could appreciate over the next few years using those HPES projections. This is what you could start to earn in equity if you buy a home in early 2025.
In this example, let’s say you go ahead and buy a $400,000 home this January. Based on the expert forecasts from the HPES, you could gain more than $83,000 in household wealth over the next five years. That’s not a small number. If you keep on renting, you’re losing out on this equity gain.
And while today’s market has its fair share of challenges, this is why buying is going to be worth it in the long run. If you want to buy a home, don’t give up. There are creative ways we can make your purchase possible. From looking at more affordable areas, to considering condos or townhomes, or even checking out down payment assistance programs, there are options to help you make it happen.
So sure, you could wait. But if you’re just waiting it out to perfectly time the market, this is what you’re missing out on. And that decision is up to you.
Bottom Line
If you’re torn between buying now or waiting, don’t forget that it’s time in the market, not timing the market that truly matters. Let’s connect if you want to talk about what you need to do to get the process started today. Contact us today at The Bouma Group, Realtors and let’s discuss what timing makes sense for your next move! 734-761-3060 or info@bouma.com.
Turn to an Expert for the Best Advice, Especially in 2021
As we approach the anniversary of the hardships we’ve faced through this pandemic and the subsequent recession, it’s normal to reflect on everything that’s changed and wonder what’s ahead for 2021. While there are signs of economic recovery as vaccines are being issued, we still have a long way to go. It’s at times like these we want exact information about anything we’re doing. That information brings knowledge, and this gives us a sense of relief and comfort in uncertain times.
If you’re thinking about buying or selling a condo or home today, the same need for information is very real. But, because it’s such a big step in our lives, that desire for clear information is even greater in the buying or selling process. Given the current level of overall anxiety, we want that advice to be truly perfect. The challenge is, no one can give you “perfect” advice. Experts can, however, give you the best advice possible.
Let’s say you need an attorney, so you seek out an expert in the type of law required for your case. When you go to her office, she won’t immediately tell you how the case is going to end or how the judge or jury will rule. If she could, that would be perfect advice. What a good attorney can do, however, is discuss with you the most effective strategies you can take. She may recommend one or two approaches she believes will be best for your case.
She’ll then leave you to make the decision on which option you want to pursue. Once you decide, she can help you put a plan together based on the facts at hand. She’ll help you achieve the best possible resolution and make whatever modifications in the strategy are necessary to guarantee that outcome. That’s an example of the best advice possible.
The role of a real estate professional is just like the role of a lawyer. An agent can’t give you perfect advice because it’s impossible to know exactly what’s going to happen throughout the transaction – especially in this market.
An agent can, however, give you the best advice possible based on the information and situation at hand, guiding you through the process to help you make the necessary adjustments and best decisions along the way. An agent will lead you to the best offer available. That’s exactly what you want and deserve.
Bottom Line
If you’re thinking of buying or selling a condo or home this year, let’s connect to make sure you get the best advice possible. We have access to all of the real estate data out there and are constantly analyzing it so we can give our clients the best advice possible. Contact us today at The Bouma Group at info@bouma.com or 734-761-3060 and we’ll help make your real estate goals a reality.