Stop Trying to Time the Housing Market

By Mark Mahaffey

Mark Mahaffey is the Broker and President of Mark Mahaffey and Associates Real Estate, a full-service real estate firm based in Athens and Watkinsville, Georgia.

With mortgage rates now above 7%, and some loans quoted at 7.38%, the question we hear most often is whether this is really the time to make a move.

It is an understandable question. Rates have climbed again, and many buyers and sellers feel the natural pull to wait for something better. Our answer may differ from what you expect, because waiting in hopes of timing the market is rarely the strategy it appears to be.

Rates affect every market equally. An interest rate above 7% will likely slow activity a little further in a market that has already cooled. There is, however, nothing about our particular area that changes that picture.

Homeowners in Athens are not getting an easier deal than the rest of the country, and they are not being hit any harder either, because the rate is the same one everyone is dealing with. It is one more factor to adapt to, one piece of the equation to take into account.

It is also worth keeping in perspective. According to Freddie Mac’s long-running rate survey, today’s rates remain below the historical average, and in the 1970s and 1980s, a 7% rate would have been welcomed as a gift.

Timing the market cancels itself out. For decades, we have watched people try to time the market, and it rarely works out the way they imagine. A seller hopes to list at the very top and bring in as much money as possible, yet some of the greatest minds in finance cannot predict when that top will arrive.

Even if a seller somehow catches it, a second problem remains: that seller still needs a place to live, and the next home will be purchased at the top of the same market. The reverse holds just as true.

Wait to sell at the top, and you buy at the top. Wait to buy at the bottom, and you sell at the bottom. Timing the market cancels itself out.

Waiting for the bottom carries real costs. The only way to truly win the timing game is to sell at the peak and then wait to buy at the bottom, which raises an obvious question: where does the family live in the meantime?

For many, the answer is moving in with parents or grandparents, which is not so good for family relations. If that is your lifestyle choice, we are not knocking it, but most people who end up there are making that choice because of finances, not because they want to.

Then comes the harder question of how long the wait will last. Six months? A year? Five years, or ten? No one can reliably say when the bottom will come, and a child born at the start of that wait could be ten years old by the end of it, having grown up in a grandparent’s basement.

Let life drive the decision. When our clients ask whether they should move now, we ask them a different question: what is going on in your life? It is wonderful when a sale or purchase happens to line up perfectly with the market, but chasing that outcome rarely serves people well.

The better reasons to move are personal ones. Perhaps you have had another child and need more room. Perhaps the kids are moving out, and it is time to downsize to a home that fits your next chapter.

Perhaps a promotion means relocating, or your children have had children of their own, and you would like to live a little closer to the grandkids. Those moments do not wait for an ideal rate, and putting them on hold for a decade in pursuit of a perfect market costs far more than a point or two of interest.

Good moves follow life’s timing. Our advice is to keep rates, transaction details, and market forecasts from driving your decision. Most of our clients, once they step back, agree that they have been placing too much weight on the money and not enough on their family.

The people who make good moves are the ones who make that decision when their life calls for it. When the answer to whether you want to move becomes yes, that is the time to start planning the next step.

If you are wondering whether now is the right time for you, we would love to talk it through. Call us at 706-543-3008, email us at m.mahaffey@markmahaffey.com, or visit blog.markmahaffey.com.

Let’s look at what is happening in your life and figure out what makes sense for your family.