No one knows where interest rates are going… not even the Federal Reserve (The Fed). And although inventory came racing back this year, some say it may not continue to grow. So if you’re thinking of market timing strategies to get the most for your capital today… think again.
As for mortgage rates, let’s look at what could happen if they go up, or down.
If you’re buying now, I could guess you’re planning to enjoy your new property for the next 5-7 years or longer. So the question is, “what does it matter where rates are in 6 or so months. Today’s rate might be the top of this year’s run-up and starting to fall… Or it may be aligning with the Fed’s decision to hike rates until, or unless, inflation recedes.”
But if you’re trying market timing strategies for interest rates… good luck. It rarely works.
If mortgage rates go up, you’re a hero for buying today. And, you’re locked into this lower rate. But if rates go down, you could opt to refinance at a later date.
If prices go down, it won’t matter as you were buying for the longer term. If prices go down low enough, buy another property at a great price.
Or you can wait until there’s more inventory, which may push prices down further. As regular readers know, inventory stalled the last 60 days. As you can see in my Weekly Inventory Update below, last week saw a significant uptick in available properties.
My point is this: none of this matters unless you are a flipper. If your strategy is to flip in the next 6-12 months, you’ll be taking on a lot of risk. If this is you, market timing strategies are like find a needle in a hay stack – it’s just plane hard.
But if you’re seeking a home to live and enjoy, right now is a great time to be actively searching. Inventory is still up (97% since last February). Demand has slowed. It’s still “off-season” (for another 30 days). And, sellers are seeing their properties linger on the market longer. They’re nervous. And, there are more and more prices drops each day.
Market timing strategies for both sellers AND buyers are the same risk. If you need to sell, today’s a great day. If the need doesn’t exist, but you want to get your hands on cash, then today’s market is all you have. Knowing this, market timing strategies shouldn’t occur.
But don’t take my word for discrediting market timing strategies. Here’s a neat Forbes essay that will shed more light on this subject. This essay is for folks trying to time the stock market. Like real estate, there are sellers and buyers of shares. But any number of things can go wrong at the moment you decide to sell, or buy.
I’d love to hear your perspective on market timing strategies. Drop me a note with your thoughts. Or let’s grab a healthy green drink together and sort it all out…
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** High season is 30 days away. Are you ready? Let me help you enjoy the life you’re here to live with these ideas…
*** If you know someone who may benefit from my weekly eLetter or who may be in need of my real estate services… I’m NEVER too busy for your referrals.
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*** Your Weekly INVENTORY Update ***
* 34 months ago there were over 54,000 properties available in South Florida. It bottomed this February at 14,485… or a 73% drop.
* Last week there were 28,060 available.
* This morning’s Inventory is 28,578.
* Inventory is up 97% since February lows… but still down 48% since pre-pandemic
