It doesn’t take a financial expert to take a quick look at the stock market and deduce that investors are on edge. One economic report can create a 500+ point rally only to be eliminated two days later by a questionable employment outlook by a noted economist. The markets are clearly trying to find their way and make sense of the data it’s getting from a gazillion sources. So are buyers and sellers looking at the stock market to bolster their confidence or provide a leading indicator for what’s to come in the housing market. We have seen market volatility impact buyer and seller psychology in the past, and we’re here to share some lessons learned heading into the last stretch of 2015.
As Warren Buffett is noted for saying, “it’s not about timing the market, it’s time in the market that matters.”
Our advice to buyers: if you’re looking to the markets to somehow justify your purchase, focus instead on your needs and the time horizon for holding your property to avoid comparing apples to oranges.
- What are your reasons for purchasing a home? (i.e. getting married, growing family, etc.)
- How long will you be holding on to your property? (i.e. 5-7 years, indefinitely, etc.)
The overarching question to consider is: does it make sense to weigh the short-term asset movement of the stock markets against the long-term asset value of a home and the benefit that having that home brings to you?
Our advice to sellers: let your life needs dictate your reason to list and sell, not the markets.
- What are your reasons for selling right now? (i.e. downsizing, moving, etc.)
- Do any of those reasons change based on your portfolio value?
Does it make sense to delay a decision by one to two years based on the predictions you make now about the future? Think “a bird in the hand vs. two in the bush” and maintain your discipline.