Best or Worst Financial Decision of my life - Timing the Real Estate Market
22 March 2009I’m buying a house. Not just any house, but a very special house on Castledown Rd in Pleasanton, CA.
I sold my house in Southern California in May of 2006. When we moved up to Pleasanton for my job at the time, I decided that renting would be a much better idea, making a prediction about the real estate market. That turned out to be a good move, as housing market prices have fallen approximately 30% nationwide in that time.
I’ve been sitting on the sidelines of the real estate market waiting for the right time to get back in, and I’m taking the plunge. We are due to close on a house within the next few days.
It’s been interesting to watch the hysteria. There are plenty of people that still think it’s a terrible time to buy, and then of course there is the propaganda on the other side. Quick question: Has anyone ever met a realtor that has told you that it isn’t a good time to buy?
This reminds me of my experiences with the stock market. The emotions of a bubble are the same. Here’s a great image that illustrates, from moneyweek.com.
So what stage are we at right now with the real estate market? Capitulation? Fear? Despair? I guess the trick to finding the "bottom" is the definition of "despair". One possible definition of despair is if everyone tells you that you are crazy for buying a house right now. That’s certainly happening to me, so we must be getting close. 
My toying with the stock market taught me that you don’t want to listen to the general public when making a decision on market, in fact, quite the opposite as the picture above illustrates. While I’m not convinced that I’m timing "the bottom" of the real estate market perfectly, I’m making a big bet that I’m within 6 months of the bottom.
We’ll see.
Either way, this is a very special house. It’s a fixer upper — truly the worst house in the best neighborhood, so we are getting it for 35% less than it sold for in 2006. It’s in Pleasanton, CA, a community that housing values hold much better than surrounding areas because of outstanding schools, a strong community, and a "no growth" policy that prevents additional houses from being built. We are very excited about doing the work necessary to build it’s value and make it a place we can call home — although it’s going to take 5 years of weekend warrioring.
Time will tell if this was the best, or the worst financial decision of my life. Wish us luck!
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on March 24th, 2009 at 7:43 am
[…] of them (53.5%) are first time homebuyers, according to a new survey commissioned by Move, Inc Best or Worst Financial Decision of my life - Timing the Real Estate Market - flexyouruniverse.com 03/22/2009 I’m buying a house. Not just any house, but a very special […]