#ASKSETHANYTHING: Why “timing the market” isn’t a thing

“The best time to plant a tree was 20 years ago, the next best time is today.”

—Chinese Proverb

The concept of waiting for the perfect time is a familiar one. From launching a business venture to embarking on personal journeys, the idea of optimal timing often dictates our decision-making process. Home buying is no exception.

Many aspiring homeowners fall into the trap of hoping the stars will align, holding out for that elusive “perfect time” to make their move. But the truth is, waiting for the perfect time in home buying is often more illusion than reality, and it can actually hinder rather than help your pursuit of homeownership. I get it too. There are a lot of opinions out there telling what you should do. Therefore, I figured I’d tell you mine. LOL

Timing the Market: A Risky Endeavor

One of the main reasons is the dynamic nature of real estate markets. Markets are influenced by many factors, ranging from economic conditions/cycles and interest rates to local market trends and demographic shifts. The inherent unpredictability of these factors makes it impossible to accurately predict the “perfect time” to buy a home. While you might be waiting for prices to drop or interest rates to decrease, the reality is that market fluctuations are not always predictable, and they can change rapidly.

Opportunity Cost

The concept of “opportunity cost” refers to the value of what you give up when you choose one option over another. When it comes to waiting for the perfect time to buy a home, there’s a significant opportunity cost involved. The time spent waiting for ideal conditions could be better used in other ways, such as building equity, enjoying the benefits of homeownership, and investing in your future. Instead of waiting for that perfect time that may never come, it’s often more prudent to focus on the long-term benefits of owning a home.

Life Doesn’t Wait

Life events and circumstances often dictate our major decisions. Waiting might mean putting off important life milestones, such as starting a family, advancing your career, or settling into a community you love. These life events are more important than trying to time the real estate market. Homeownership is not just about financial considerations; it’s also about creating a stable and fulfilling environment for yourself and your loved ones.

The Power of Being Prepared

Rather than focusing on finding the perfect time, aspiring homeowners can benefit from being prepared to take advantage of opportunities as they arise. This means understanding your financial situation, researching different neighborhoods, and being ready to make an informed decision when you find a property that aligns with your needs and preferences. By being proactive and flexible, you can position yourself to make the most of the opportunities that come your way, regardless of market timing.

The truth is, market-timers always lose. The best advice I can share with you is to talk to a lender far before you think you are ready. The truth is, most people have no real idea if they are ready or not; even if they think they know. We tend to make up these stories, these what-ifs that build up in our minds and create psychological barriers that stop us from moving forward. Until you speak to a lender, lay all your finances out, and get some concrete black-and-white numbers in front of you, you really have no idea how close you may already be to being ready.

To be clear, this doesn’t mean that EVERYONE should buy a house today. In fact, I often tell people NOT to buy because it’s not always the right move. But the math is clear that waiting for the perfect time isn’t really a thing … best get started sooner rather than later.

Seth Lejeune is a partner/team leader at REMAX HOMEPOINT in Royersford and can be reached at asksethanything@gmail.com or 610-804-2104.