Can Sellers Time the Market?
This article points out the dangers of trying to time the market.Home sellers hold out for higher prices
"Sellers may be trying too hard to time the market, experts say. “The unwillingness to sell is a bit surprising based on the hard facts of many markets that make it an excellent time to sell now,” says Daren Blomquist, vice president at market researcher RealtyTrac. “It’s human nature to want to sell at the very top of the market and buy at the very bottom.” In hindsight, he says, buyers too would have found much better deals in most markets in 2009, 2010 and 2011, when prices were still dropping, than they would now that prices are rising. "
If you Google "market timing" and you will get pages of articles mostly saying it is futile to time the market. Almost all of those article refer to the stock market.
Wikipedia, the first search result on the list, defines market timing as such:
"Market timing is the strategy of making buy or sell decisions of financial assets (often stocks) by attempting to predict future market price movements"
Note it says "often stocks" but refers to "financial assets".
Well a home is a financial asset also. In fact, for most people it is their largest financial asset. So why would sellers "wait for the market" and try to "time it"? How many saw the bubble and "timed the market" by selling at the peak? Because they knew it was the peak? Not many if they are honest!!
So what makes them believe they can wait and time it this time?
Who can predict what buyer's interest rates and hence purchasing power is going to do? Who can predict what other world economies and governments will do in this global economy that will affect our economy. Even the Federal Reserve Presidents with all their data, training and experience cannot agree.
So how is average Joe home seller going to predict the market for real estate?
Most experts are saying that current price increases are temporarily larger until more sellers realize it is a good time to sell. In addition. “House price increases will dampen when the Fed starts to raise rates again,” says Stuart A. Gabriel, director of UCLA’s Richard S. Ziman Center for Real Estate.
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