Myths Of Real Estate: #5 Up Markets Are Good, Down Markets Are Bad.
This one is related to myth #1, but it is sufficiently different in my eyes to warrant its own post. Besides, this is the number one question I get when people want to start a general conversation about real estate.
Essentially, as I’ve often heard from veterans in the real estate world, “There is no such thing as a good or a bad market.” When I first heard this, I was fairly new to the field and I half dismissed it as salesman talk. After more experience and much more reflection I have come to agree with the statement. I do find it a little too succinct though. My way of wording it is “Whether the market is going up or down or sideways, it’s always good for somebody and bad for somebody else. It really depends on what cards you’re holding.” This is after all why we have the terms “Buyer’s market” or “Seller’s market”.
Market conditions are really only either good or bad for people who make their living building or selling homes. Slow (down) markets mean less business after all busy (up) markets mean more business. Yes, it really is that simple. For everyone else, from homeowners to investors it really depends on their financial situation and what their plans for the next few years are as there are strategies for all markets that will maximize their long term revenue/equity.
The thing about buying, is that there are no bad times to buy in terms of what the market is doing. There are only good times and better times to buy so long as you do it correctly. As always the most important factor is whether you can afford those payments. The rest is detail.