Timing the Housing Market Crash: Why You Can’t Buy Low and Sell High in Real Estate

A number of people are trying to time the real estate market crash. Their idea is that if they sell before the market crashes and buy when it goes down they can make an arbitrage windfall. It is not possible to perfectly time the real estate market and there are a bunch of costs and other expenses that most people don’t think of.

Rumors of a real estate market crash have some people thinking of selling. The problem is that once they sell, they will become a tenant again and likely have to pay rent at a higher price than their old mortgage. Also they lose the mortgage interest tax deduction when selling as well as the principal reduction on their loan.

The best way to own real estate is to buy and hold for a long period of time, and sell only when its absolutely necessary.

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