When is the right time to buy or sell? This is a question that perplexes many people. There are two answers - one for homeowners moving house and another for investors.
If you are a homeowner intending to move to another home within the same price bracket and living standard as you are in currently then there is no better or worse time to sell or buy. The reason is that all buyers and sellers face the same market forces, so there should not be a big variance in price.
However, should you be selling to move to a higher priced area it can be very tough especially if you are selling in a flat or declining market. In this situation people often tend to price their homes according to what they need to buy their property in the new area. The reality is that your destination has no influence on the value of your home. You only need to ask yourself if you would lower the price of your home to sell to someone moving from a lower priced area.
The other more common situation where the end destination is more costly is that of people downsizing and moving into retirement estates where the units are more expensive than free standing homes, because you are paying for the added benefits of security and lifestyle.
All upwardly mobile property prices need to take a breather as they have been doing for the past 18 months. Nevertheless prices have tended to increase albeit at a lower rate over a longer period of time.
For the homeowner who plans to live in the home for a long time there is never really a good or bad time to buy and when selling they really need to be realistic about the returns they can earn on the home that has provided security above all else.
If you are an investor, you would have heard the investment wisdom that says one should get into the market when prices are low and sell when prices are high, or you think you have made sufficient profit. Some advise that the time to buy an asset is when nobody else wants it and to sell when everyone is clamouring for it.
Investors still need to be realistic particularly in a changing property market. There are very few bargains to be had especially not those that can be given a lick of paint and returned to the market a few months later with a couple of hundred thousand rand added to the price. If the market was rising that quickly surely the seller would have done the same and waited a little longer for the better price.
If as a homeowner or investor you find you cannot sell your home for more than the price you bought it for then it is quite likely that you have not owned your home for long enough to have built up equity in it. Therefore, you will need to either own it longer or assess the necessity of taking the loss. People don’t sell for less than they paid unless circumstances force them to.