Tony Robbins and Warren Buffet agree on this one perspective regarding timing -
“Your plan can't be based on trying to time the market because you're going to be wrong...”
When it comes to real estate, we basically have a constant fear of being left feeling like we overpaid for our home because it was purchased at the 'top of the market.' But the reality for most homebuyers is that if you plan on owning that home for 10+ years, it's likely that you'll see the market dip and rise (not to mention interest rates and the equity that just grows over time) so the price today isn't so important.
Timing in real estate is more personal. For the first time homebuyer who is purchasing a home as a place to live indefinitely, what matters more than the overall economy is:
- Are you steady in your source of income?
- Are you planning on sticking around for years?
- Are you confident with what you have in savings?
If these are all yeses then the state of the economy is secondary to your readiness and it's better to get into the market as soon as possible so that you can watch your asset grow overtime.
On the other hand, if you're strictly an investor, the reason for purchasing real estate is totally different. Flipping homes within 3 months, won't make sense if it's not a great deal at first. But it also won't make sense during a time when home sales are down because you won't be able to sell it as quickly and at a price that makes it worth it. Location, interest rates, consumer confidence, cash on hand, and many other aspects should be considered when getting into flipping or wholesaling – not just 'market.'
Another investor option is to buy and hold ('renting'). In this scenario, a better deal up front makes for positive cashflow to occur quicker. But if he location is right, the tendency of real estate has always been to generate cash flow over time, as well as equity.
For the majority of homebuyers, if you find a home that you love with an extra room and a family member needs to be taken care of- it's a great time for you to buy; if you have some savings with a solid job and you just got married- it's a great time to buy; If you're single, have a great gig and want to invest in your future with a buy and hold- it's a great time to buy. I'm sure you catch my drift by now.
The same generally goes for home sellers. If you want to sell your home just because you can get top dollar for it, where are you going to live afterwords? If you're gonna buy a home for top dollar than you may not be making as much money as your 'timing the market' to make. If you have a place you were already intending on moving to, if you want to rent for a few years and put the proceeds into another asset that you believe in or if you want to backpack the world for a while - then it makes sense to sell but all of that is personal and not market-related.
Gary Vee said it best when he summarized Warren Buffett's strategy-
'Unless you're betting on America disappearing, you will win.'
The point is to invest and commit to continued growth.