Jan 5, 2024

With the shifts in real estate over the past five years, it’s easy to get caught up in the whirlwind of market fluctuations. Property values skyrocketed, then dropped, and interest rates rose. When looking at remortgaging at much higher rates or selling at lower market rates, it’s easy to hit the panic button and make impulsive decisions. Many people kick themselves for buying when the market was high because they feel they lost 100k when values dropped. When our clients express these feelings, I love to help educate and assure them that they still made the right move. And here’s why.  

It’s normal to obsess over buying at a market low or selling at the market peak. This strategy may seem the best, but I assure you it’s not the most valuable one. The winning strategy is shifting your focus on how long you’re in the market. Why? Time in the market always always beats timing the market. This means even if your home dropped 200k in value right after you bought it, holding onto it for an extended period will put you much farther ahead and make the drop in value negligible. While the market may feel unstable in the short term, in the long term, decades have proven that homes continue to increase over the long run. 

As Yetta and I considered 2023 just before New Year’s, we looked back at our clients’ successes. We found a pattern that we’d love to share with you that illustrates what I mean about time in the market over timing the market. 

One of our clients purchased a rural property in 2017 for $115,000 and sold it for $354,000 in 2023. That’s more than double the investment in 6 years! Another client bought a condo in 2018 for $162,000 and sold it for $350,000 in 2023. That’s a profit of $188k in 5 years. Consider, after-tax dollars, how many years is this off your salary? How many years would you have to work in a career to make this kind of money? All while enjoying living in that home? 

Some of you might say, “Sure, Ken, but these are properties on the lower end. You can’t replicate these numbers for higher-end properties.” Au contraire! Even higher-end properties saw significant gains. We have a client who we helped purchase a property for $895,000 five years ago, selling for nearly $1.4 million last year. Should I highlight that this is a gain of 505k? In 5 years. That’s a “salary” of 100k per year to live in your home! Can you think of a better “job” than this?

If you notice, these are all very different properties – condo, rural, and higher-end. And none of them were flip-and-sell properties. They had nothing more than basic maintenance and some paint. And these properties sold at current prices, not the peak prices of the Covid years. Over the years, we have seen consistently high gains for our clients, regardless of the market they purchased in, even when they sold during market downturns. Provided – they had time IN the market. 

The real estate market, at times, feels like a rollercoaster ride, with ups and downs that can leave you feeling dizzy or, worse, panicked. I’d love to encourage you that these are just feelings. Time in the market means this won’t be your reality. So, if you are fretting about your property values or wondering if you made a suitable investment, take a page from our playbook. Borrow our professional know-how and trust the time-proven principles of real estate. Slow down, assess your situation, and consider contacting us if you need more guidance. Your winning success strategy is most consistently not about timing the market perfectly but mastering the art of time in the market.