By: Candice Schott

The truth about timing the market.

Timing the Market: Why It’s Risky Business (And What You Should Do Instead)

We get it—whether you’ve got a family home or a portfolio of investment properties, figuring out the best time to sell can feel tricky. You’ve probably heard about “timing the market” as a strategy. It’s something people talk about in the world of stocks, and it occasionally gets tossed around in real estate too. But here’s the thing: timing the market is a bit of a gamble, and we wouldn’t recommend it for your real estate investments.

Let’s break down why.




How Does Timing the Market Work?

Timing the market is all about trying to predict the best moment to buy or sell based on expected price changes. While this works (sometimes) in the stock market, real estate is a different ball game. The idea that you can perfectly time when to sell for a big profit or buy at the lowest price is a bit, well… iffy.

Here’s why: even if you somehow knew when prices were going to rise, it’s a challenge to time everything perfectly. You’d need to:

  • Get your home on the market right before prices spike

  • Find a buyer willing to pay your asking price at exactly the right time

  • Hope the price doesn’t shoot up even higher after you sell, making you feel like you missed out

And if you’re trying to buy? Good luck finding the perfect bottom. By the time you realize prices aren’t going to drop any lower, they’ll likely be climbing again, and you’ll have missed the window.

So yeah, it’s pretty iffy.




Recession and Real Estate

During a recession, housing prices tend to adjust rather than plummet. Yes, sales might slow down, and there could be fewer buyers, but prices usually even out instead of dropping like crazy. This is where having a smart real estate team comes in handy. We watch for signs like flat prices and homes sitting on the market longer than usual, so you can time your buy or sell based on real data—not guesswork.




The Best Time to Sell? When It’s Right for You

This might sound repetitive, but it’s true: the best time to buy or sell is when it’s right for you. Life has a way of throwing curveballs that make the decision obvious. Some reasons it might be time to sell:

  • A change in relationship status (divorce, marriage, or somewhere in between)

  • You’re shifting your investment strategy and want to diversify your portfolio

  • New tax rules like the vacant property tax are coming into play

  • Your mortgage term is ending, and those interest rates aren’t looking too appealing

  • You’ve got tenants who are either a nightmare or moving on

  • Your financial situation or health has changed

These are just a few examples of when selling makes sense based on your life, not the market.




No Crystal Ball Here

Even the best real estate strategists can’t predict the market with 100% accuracy. So, when should you buy or sell? Here’s a quick rundown:




Buying:

Real estate guru Ray Brown says, “The best time to buy was five years ago.” True! But really, the best time to buy is when you’re ready. If you’ve got:

  • A decent down payment

  • Enough income to pass the mortgage stress test

  • Confidence in handling current interest rates

  • A life situation that says homeownership feels right

  • A realistic budget for what you can afford

Then it’s a good time to buy for you, no matter what the market is doing.




Selling:

When it comes to selling, it’s less about timing the market and more about timing your own situation. It all comes down to what you paid for your home, how much you’ve paid off, and your current equity. The longer you’ve owned it, the more you’re likely to make, but selling too soon can cost you thanks to mortgage amortization.

Here’s the deal: when you make mortgage payments, you’re not just paying off the house. A big chunk of those payments goes toward interest at the start, which means your equity doesn’t really grow much until a few years in. After about five years, more of your payment goes toward the principal, so selling before then might mean less profit in your pocket.

The key takeaway? Timing your sale based on your mortgage situation is way smarter than trying to time the market.




The Bottom Line

Whether you’re buying or selling, relying on market predictions is a risky strategy. Life moves fast, and markets change faster. The best approach? Work with a real estate team that knows the market inside and out and can help you make decisions that are right for you—not based on guesswork.