As the phrase “housing bubble” is thrown around, folks start to compare the present pricing boom to the tech-stocks of the 1990s stock market. Homeowners are trying to determine if the real estate market is peaking, and how they can take advantage. A word of caution: it’s practically impossible to “time” this market.
The biggest gamblers are selling their homes, intending to buy back into the market when prices eventually fall, or when the “bubble” bursts. This trend started a couple years back, but even within the least year, some markets have seen prices climb 20%. If you sold your home last year, you still couldn’t afford to buy a comparable home yet.
Deciding to buy or sell your home based solely on financial opportunity can be disastrous. Remember that, unlike stocks, buying and selling houses can involve high costs, and the tax implications must be seriously considered. In markets where homes regularly sell in the seven digits, capital gains can enter the picture.
People who need to move shouldn’t hesitate to plan their sale and purchase. It can work to your advantage if you’re downsizing, or moving from a high-end market to a less pricey one. Real estate IS like the stock market in one very important sense: it’s for the long term. Over a twenty to thirty year period, it has not gone down.