That is a question that both Buyers and Sellers ask me all the time.  Buyers want to know because they are afraid to buy a home if they think the home will continue to decrease in value.  Sellers want to know because they’re afraid to sell is they need to keep lowering their offered price in order to sell their home.

It’s a real mess.

The truth of the matter is that finding the “bottom” is a lot like finding the “top”.  You don’t know where it is until you’ve passed it.

I used to joke around with my Seller clients who were wondering where the “top” of the market was going to be when there was this huge Seller’s market from 2000-2005. I told them that one day 50,000 people would wake up and decide that was the day to sell their house.  Sure enough, that’s almost what happened in the MD Suburbs of DC. Instead of 50,000 people waking up and deciding to sell their homes, you had almost that many people realize they could no longer afford to pay their mortgage.

Market Timing

Most financial analysts will tell you that it impossible to time the market.  If anyone really knew where the bottom or top was they would be multi-gazillioniares.

While it is true that some people get lucky with buying a Microsoft or Apple when they were pennies, most people do not know which company may be the next big winner.

The same is true about homes.  Sure, some real estate investors get lucky and buy when the market is low (like now!), hold on to the home by renting it out and then sell for a large capital gain years later.  Most people, though, want to buy a house to live in, raise their kids or enjoy their retirement, put down roots in a neighborhood. That kind of thing cannot be timed.  It’s always a good time.  Sometimes people get lucky and buy their home in a buyer’s market (like now!) and sell into a Seller’s market.

Sometimes people live in a home for many years, pay down their mortgage and establish their wealth and equity that way.  What a concept!  It sure beats trying to figure out the where the bottom might be.