The Market Keeps Changing

It makes you scratch your head sometimes. A year ago in March we could barely give away houses. One year later we're back to Silicon Valley as usual. Multiple offers and a shortage of decent homes to sell. It seems that this market changes so very rapidly from one extreme to the other. Fortunately, we spend the lion's share of the time in a seller's market. This has the obvious benefit for Sellers that they can sell their home easily with great terms. It's also a benefit for buyers. Where a year ago the financial analysts were saying "You never want to try to catch a falling knife", it is now evidnet that the knife has fallen and clearly settled onto the floor. Now the trend has reversed and the market is climbing. So the benefit for buyers is that they can now get in while prices are still increasing. Ask anyone who bought (around here) in 2004 whether owning their home from 2004 to the peak in perhaps 2007, depending on the micromarket, gave them peace of mind when the values plummetted and they will certainly say "Yes." Did they end up lower than their purchase price? In most cases yes. Did they end up underwater when considering their 20% down payment? In most cases no, they still had equity. So clearly, buying on an upswing does have its benefits; especially if you buy early in the upswing and get the benefit of a long bull (Seller's) market as wind at your back. Past performance is no guarantee of future results, but traditionally here in Silicon Valley we have long runs of bull market and very short windows of falling prices. That makes now an ideal time to buy and strangely enough it's also a good time to sell because it's always better to sell in a seller's market. In addition, if you plan to sell and buy elsewhere, you can still take advantage of a buyer's market in  places like Nevada or even outlying areas of the Bay Area such as Salinas and Gilroy. The Seller's market always seems to radiate outward from the center. For lack of a better geographic center, I like to use Google Headquarters in Mountain View.