This seems to be the question for many buyers who have been sitting on the sidelines. They fear that they will be able to buy a better house for less in the future.
I have been in real estate sales since 2000, so I have seen this ‘market bottom predicting’ before. Specifically, in the 2008/2009 mortgage meltdown. Back then everyone was trying to pick the bottom as well.
I don’t think anyone can accurately pick the bottom to the day, week or month. But, you can get close. Here are some signals that the bottom is here or close.
- Lower than average sales volumes
- Falling prices
- Low consumer sentiment
- Plenty of media articles about falling real estate prices
- General fear of the market
- Low wages growth
- Fewer people attending open houses
- Days on market higher than the long-term average
- Potential interest rate cut looming
On the other side of falling prices is a stabilization phase. This is the period where property prices are stagnant for some time before demand builds up and prices begin to rise again.
Markets do not turn around overnight. Especially real estate markets. Homeowners are very receptive to hearing that the price of their home has risen but not interested in hearing how it has gone down.
Should You Wait or Should You Buy?
I think personal circumstances trump the need to pick the bottom of the real estate market. If we were within 5% of the bottom is it smart to pass up a really nice home that checks all of your boxes?
One of the best times to buy property is when the herd is walking the other way. I have seen a lot of wealth built when people bought when few wanted to buy and sold when everyone wanted to buy.
