The misinformed, the procrastinators, the confirmation biased philosophers and the wishful thinkers tell me that there is a housing crash coming. They say prices are too high, debt levels are too high, the economy is too shaky. They say lots of things. They believe those things. Since the market is going to crash, they say they are going to wait and buy after real estate prices hit rock bottom.
I cannot convince them otherwise.
I can tell them that I was already a Realtor when the economic meltdown arrived in 2008 and at that time everyone said that they were going to wait until prices dropped by 20%, (always 20% for some reason), before they would buy.
I can tell them that prices have doubled since then.
I can tell them that I was already a Realtor when our beloved Blackberry stock went from glittering hometown hero to the dustbin of history in one short year. People then told me that they were going to wait until prices fell before they bought. They were so convinced that the prices would fall.
I can tell them that prices have doubled since then. Blackberry shrank but the tech start-ups, and other established tech companies filled the gap, and then Google arrived!
Waiting for a possible future real estate crash
I can understand why people want to wait. Who wouldn’t want to buy cheap rather than buy expensive. But this logic is in itself a little flawed. When will those doom-sayers and deal-seekers be satisfied that the market has bottomed out? What other excuses for not buying will they come up with when prices are falling?
Also consider this. There will be so much uncertainly if real estate prices fall by 20%, there is a good chance that these potential buyers will get tossed out of work.
Last year in Kitchener-Waterloo
In 2018, we saw the Kitchener-Waterloo real estate market slow down. Last year the number of home sold was down by 11% compared to 2017. And the number of days that it took to sell a home expanded from 19 days to 24 days. Average prices went up by 3.4%. Although the Kitchener-Waterloo real estate market in 2017 was moving toward equilibrium, it remained a Seller’s Market.
Conclusion: Planning or just waiting
One of my 365 Rules about Real Estate, is that you cannot time the market. It is true for sellers too. In 2016-2017 when prices were rapidly rising, some home sellers kept waiting and waiting and waiting and then when the brakes got slammed on they’d missed their chance to sell at the very top of the market. They had waited too long.
So, If you are waiting for a real estate crash to occur, it’s not going to happen and even if it did, do you have a plan for when that happens or are you just waiting?
Call to action
If prices start going down, if the real estate market gets a little soft, take advantage of those opportunities. Buying and selling real estate is a long-term proposition. Let’s set up a time to chat.