Buy Low - Sell High

I was talking to a client over the weekend about the Real Estate market, and since I agree with him, I wanted to pass along my thoughts. We were talking about Real Estate in Corona Del Mar in particular, but it applies to all areas with high demand, like Newport Coast well. Everyone knows the old adage about getting rich..."Buy Low and Sell High", and we were talking about how so many people do this wrong. There are a lot of factors to to all this for sure; like loan availability and the state of the financial markets, and everyone has their own goals, timing and needs, but the premise still remains. It is best to "Buy Low and Sell High". If you are able to, it is best to align your purchases and sales throughout your life according to these market cycles.

With that in mind, it is a bit of a shock to see so many people do the opposite. So many people sit on the sidelines for years hearing the stories of how "everyone else" is making so much money off Real Estate purchases. These people wait and wait and keep hearing stories from friends, relatives, co-workers and the news how prices are going up and housing is HOT. Once this hits a fevered pitch, and it seems like everyone else is buying properties, holding for a year and making a killing! This is when so many people finally decide to give it a try. They start looking at homes and decide to make a purchase or get that investment property.

The problem with some of these purchases, is that the cycle then changes. The prices don't appreciate for some time, and then start to weaken. Over the next year or two, prices are falling and things are getting worse. These same people then hear stories of doom and gloom and how terrible the market is for Real Estate. They hear how everyone else is trying to Sell and needing to cut prices just to unload that property. Then they get scared that things may keep getting worse, and they decide to put their home up for sale. Eventually it sells for a loss, and they vow to never trust Real Estate again. 

I have met some people who have fallen into this cycle a few times actually. They seem to always buy too late or sell too early. They buy at the top with all the hype of a hot market and get overcome with fear and sell at the bottom of a soft market. I want to just bring out the old adage once more in hopes that it will stick with you all. "Buy Low and Sell High". If you can time your purchases in life to align with these cycles, you will do well. We are in one of those very exaggerated market cycles right now. I don't know if today is the best deal in Real Estate purchases for Corona Del Mar of Newport Coast, or if that day will be 6 months from now. But I do know, we are definitely well along on that downward curve. So if you are at a time in life where you are thinking about a new home purchase or investment, I certainly don't think the news should scare you off. There is no doubt we are "Low" right now, and according to the adage, that means it is time to "Buy"... then we'll see you at the top in the "Rich" family.