Timing The Market and Hitting The Bottom

Are you still waiting for the “bottom” in the real estate market? The problem with trying to catch the bottom in any market is that it is not apparent until after the fact. There is a saying among stock traders that trying to catch the bottom is like trying to catch a falling knife. So “are we there yet?” According to NAR – the National Association of Realtors – the commercial sectors “appear to be stabilizing.” Not an overly strong endorsement but one that provides some optimism nevertheless. From an historical and empirical perspective, we should be there given the fact that last bottom of the market was 1991 and real estate typically runs in 18 year cycles. So what should you do? It was easy back in the day of rising prices – buy now or pay more later. The fear now is buying in front of the bottom and seeing the value of your investment fall. Suppose there was a creative way to hedge that bet? Stay tuned….