Andrew Lam argues you can't time the real estate market, so buy or sell based on your life needs instead. Vacaville home prices rose from $235,000 in 2011 to $628,000 recently, averaging 4% annual appreciation. He bought in 2017 when rates jumped from 3.25% to over 5%, then refinanced when rates fell.
Hey, it's Andrew Lam here, founder of the Andrew Lam Real Estate Team. Today I have my handy dandy flip chart here to tackle the question of when is the best time to buy or sell your home? Hey, everybody, today we're covering when is the best time to buy or sell. We get this question a lot, especially right now, as we are in somewhat unprecedented times over the last decade, of prices going up and up and up and up. And we're getting asked right now, especially as we're moving close towards a new year, is now a good time to sell? When would be the right time to sell? And what do you think is happening come 2022 and, and forward? Moving on. So I wanted to demonstrate this by having my flip chart here, just like I do in the office all the time with, with our agents when we're talking about the market, just to demonstrate a point. So if you could, I would like for you, as I'm drawing something, to literally yell at me through the screen and tell me when to stop. So what I'm going to draw is a market going up. And literally right now, when we're at the top of the market, yell out stop anytime here. When are we going to stop? Okay, so I think what we just demonstrated is that because this happens every single time, people will yell out stop when they think it's coming, or they will wait until we've already passed the apex and we'll yell out, okay, we are at the top now. So they are either early and the market continues to go up or they're late. Rarely has anyone been able to actually perfectly mark the time when we have hit the apex, the absolute best time to sell a home. Typically you want to buy low, sell high, or at least that's, that's the general consensus around, let's call it stock market investing, right? And people try to treat real estate the same way. The problem is you simply can't. No one knows how to time the market up or down. Same thing happens going down. Real estate investors or people who want to be real estate investors try to guess the timing and are also typically either early, right? This could be the true bottom, or they're late, prices start to go up again. Here's what I do know. Although you can't time the market and the market typically does act cyclical. If you think of this as the crash of 2007, 2008, and let's call this 2007, people thought they were awesome, they got top dollar. Whereas people who were trying to hold on and maybe knew that something was coming, but they just still wanted to go for the highest price possible, perhaps listed their home here when it really was the top, thinking it might continue to go up, and then quickly realized the bottom fell out from under them and it drastically dropped and couldn't even get this price anymore. They had to sell here and hopefully not here. Or a lot of people went through the short selling foreclosure process. If they got foreclosed on, it never sold. So we never want to be somebody who guesses what time in the market is and the market cycles. Right. We know that the peak here is never going to be as, you know, exactly where it was previously and the low is never going to be the same low. So we know over time prices still do continue to go up. So here's the thing. If you look at prices from 2008, when we were at the, let's call it the bottom 2008, 2009 and where we are today even and give that an average 4% appreciation, we are actually right where we are supposed to be with today's prices. Oddly enough, the last time I checked, which was just this last week, the average price in Vacaville, California today is $628,000. It was quite a bit lower back then. And even when I started in 2011 selling real estate, the average price was $235,000. So although it feels like in that span of time it's been this massive appreciation, taking into account before the drop and where we were, 4% appreciation calculated in. We are right where we're supposed to be. We're not over inflated. That being said, when it comes to buying or selling your home and choosing a time, the absolute best time is your own timing. When we guess what the market's going to do, that's not investing. It's not a wise decision. It's actually called speculation. You are guessing, you are hoping that the market will go up and down in your favor. The that's never a good idea. So the best thing to do would actually be to look at your own life, your own timing and the things that actually cause you to want to buy or sell a home in the first place. That's going to be job relocation, it's going to be getting married, having children, children going to college and then wanting to downsize into something else. So what really matters is selling and buying your home in a time frame where it's the least amount of stress, least amount of hassle it and you know what you're dealing with. There's less uncertainty. And that's typically going to be doing the sale and the buy in the same market. That being said, you also know what your interest rate or likely what your interest rate is going to be. The hard part about timing the market. Think about this end of 2017 November 2017, my wife and I bought a home for our small children. By that same time the following year, interest rates had gone up from 3.25% to over 5% in that one year. And yet we still found ourselves needing to take care of older generations in my family and find a home that fit all of us. So literally, November 2018, even though rates were over 5%, we found the home that worked for us. And I'm happy we bought it because rates dropped dramatically over the next couple of years and we were able to refi under 3%. But we bought a home under 500,000, which again, today the market average is well over 600. That same home now is worth 200,000 more than we paid for it three years ago. So that's why instead of trying to time the market, do what's best for your timing and just buy when you need to buy, sell when you need to sell, and seek out that professional advice to help you do those things to save you time, headache, stress, and accomplish your goals in the time that's necessary. So again, who cares about all this stuff? At the end of the day, if you buy real estate, it's a hedge against inflation and a great investment. And overall, you're just going to be doing what's best for your family when you ignore the market timing and focus on your own timing. Let us know if you have any questions if you need some advice in buying, selling or investing in real estate. And we're always here to help you create wealth through real estate.
