The market slowed in spring 04, but I was told SFH prices peaked in summer 05. I sold in December 05, so I took a 5% cut from summer 05 prices. Not a single house in my neighborhood has sold since then. When exactly was the peak? Spring 04, the time to have sold your condo, or summer 05, the time to have sold your SFH (ripple effect of real estate takes about one year).
Today, we are 18 months past the peak. Selling now gives you a loss of 10 – 20%, but if you sold at the peak, you could have $50K – $100K more. If you own many properties, then it’s to your advantage even more, to time it right.
So you make more money if you sell while days on market is low and demand is still high. Campbell and others, like jg and I, would like to know when is the peak and trough so we can optimize our entry points.
If you miss the perfect entry point, that is okay as you pointed out, because real estate is a slow moving ship. You can take 1 – 2 quarters to make sure the cycle has turned, and still have a pretty good entry point. But even then, you’re still stuck with having to define what makes a good entry point: how do you know the cycle has turned? Will you wait 18 months until the main stream media covers it?
