Does "time in the market beats timing the market" apply to housing?

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hammer10k
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Does "time in the market beats timing the market" apply to housing?

Post by hammer10k »

I've read numerous Bogleheads forums on rentals, homeowning, plus a handfull of real estate books, but I still can't decide if "time in the market beats timing the market" does or does not apply to housing.
hicabob
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Re: Does "time in the market beats timing the market" apply to housing?

Post by hicabob »

Looking at the long term trends it seems so although taxes, maintenance, insurance are negatives relative to index funds

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luckyducky99
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Re: Does "time in the market beats timing the market" apply to housing?

Post by luckyducky99 »

Housing is a personal lifestyle choice that affects your quality of life. The value of a home is more than financial.

For example, if you can't find a home for sale that you actually want to live in, then you shouldn't buy one. In that case, "time in the market" is not better than waiting to buy a home you actually want.

It took me three years to find a home I wanted to buy. I am very happy with it. I don't know whether it was financially optimal or not, and I don't care.
KlangFool
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Re: Does "time in the market beats timing the market" apply to housing?

Post by KlangFool »

hammer10k wrote: Sun May 16, 2021 9:24 am I've read numerous Bogleheads forums on rentals, homeowning, plus a handfull of real estate books, but I still can't decide if "time in the market beats timing the market" does or does not apply to housing.
hammer10k,

It does not. The real estate market is local and it has a very long cycle. For example, someone could buy a house at the peak in 2004/2005 and the price may not recover to the nominal level until 2019.

The best answer is do not treat your house as an investment. If you have to consider your house as an investment, you had bought too much house.

KlangFool
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tfb
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Re: Does "time in the market beats timing the market" apply to housing?

Post by tfb »

hicabob wrote: Sun May 16, 2021 9:54 am Looking at the long term trends it seems so although taxes, maintenance, insurance are negatives relative to index funds

Image
The difference is you can't buy the market and you can't buy small pieces over time. You can only buy 100% of a specific house at a specific time. It's more like buying a single stock that trades only once several years.
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Marseille07
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Re: Does "time in the market beats timing the market" apply to housing?

Post by Marseille07 »

hammer10k wrote: Sun May 16, 2021 9:24 am I've read numerous Bogleheads forums on rentals, homeowning, plus a handfull of real estate books, but I still can't decide if "time in the market beats timing the market" does or does not apply to housing.
It applies to housing. RE isn't as volatile as equities, but time in the market still matters. Just look at the chart a poster shared above.
hicabob
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Re: Does "time in the market beats timing the market" apply to housing?

Post by hicabob »

tfb wrote: Sun May 16, 2021 10:14 am The difference is you can't buy the market and you can't buy small pieces over time. You can only buy 100% of a specific house at a specific time. It's more like buying a single stock that trades only once several years.
Very true with the single stock analogy - I have always done well with houses over the last 40 years but have only bought in the west coast states. My relatives on the other side of the country have not fared as well.
NiceUnparticularMan
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Re: Does "time in the market beats timing the market" apply to housing?

Post by NiceUnparticularMan »

I don't know about timing the market, but history includes many cases of markets where homes depreciated for long periods, sometimes down to zero. Obviously more time in such markets meant worse financial results.

Of course even in such cases, the virtual rent savings might have made it an OK deal anyway. But I tend to agree people should be cautious about assuming that buying a house sooner will mean greater net wealth in the future.
trueblueky
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Re: Does "time in the market beats timing the market" apply to housing?

Post by trueblueky »

If you stay in the same house a long time, your transaction costs are lower and are spread over a long period.

If you buy and sell frequently, the real estate agency gets rich. So, similar to the stock market.
dbr
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Re: Does "time in the market beats timing the market" apply to housing?

Post by dbr »

hammer10k wrote: Sun May 16, 2021 9:24 am I've read numerous Bogleheads forums on rentals, homeowning, plus a handfull of real estate books, but I still can't decide if "time in the market beats timing the market" does or does not apply to housing.
What do you think those expressions mean?

What decision that you are making depends on the answer?

If you want to know if making a "bad" decision to buy at too high a price now does not matter because time in the market will wipe out the disadvantage, then the answer is that old always correct answer "it depends."

Yes, it does apply to housing (depending on what you think it means).
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Scott S
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Re: Does "time in the market beats timing the market" apply to housing?

Post by Scott S »

Property values aside, owning a house for a longer period means more time to throw your money into a pit. :mrgreen:
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jumppilot
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Re: Does "time in the market beats timing the market" apply to housing?

Post by jumppilot »

hammer10k wrote: Sun May 16, 2021 9:24 am I've read numerous Bogleheads forums on rentals, homeowning, plus a handfull of real estate books, but I still can't decide if "time in the market beats timing the market" does or does not apply to housing.
Time in the market always.

Hypothetical investor way overpaid for a SFH back in 2000, in a stable city with a stable job market. Kicking themselves because they got caught up in the madness and overbid. However, they’ve kept the house. They are selling now because they want to move to their vacation home now that they are retired.

Was it still a bad deal after all these years?
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Re: Does "time in the market beats timing the market" apply to housing?

Post by KlangFool »

jumppilot wrote: Sun May 16, 2021 3:32 pm
hammer10k wrote: Sun May 16, 2021 9:24 am I've read numerous Bogleheads forums on rentals, homeowning, plus a handfull of real estate books, but I still can't decide if "time in the market beats timing the market" does or does not apply to housing.
Time in the market always.

Hypothetical investor way overpaid for a SFH back in 2000, in a stable city with a stable job market. Kicking themselves because they got caught up in the madness and overbid. However, they’ve kept the house. They are selling now because they want to move to their vacation home now that they are retired.

Was it still a bad deal after all these years?
jumppilot,

How many people can confidently say that they will have a stable job living in the same city for 20+ years? Some do. But, many of us don't.

And, how many of those confidently think that in 2000 and found out that they were wrong? They will not be posting in this forum if that happened to them.

KlangFool
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jumppilot
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Re: Does "time in the market beats timing the market" apply to housing?

Post by jumppilot »

KlangFool wrote: Sun May 16, 2021 4:16 pm
jumppilot wrote: Sun May 16, 2021 3:32 pm
hammer10k wrote: Sun May 16, 2021 9:24 am I've read numerous Bogleheads forums on rentals, homeowning, plus a handfull of real estate books, but I still can't decide if "time in the market beats timing the market" does or does not apply to housing.
Time in the market always.

Hypothetical investor way overpaid for a SFH back in 2000, in a stable city with a stable job market. Kicking themselves because they got caught up in the madness and overbid. However, they’ve kept the house. They are selling now because they want to move to their vacation home now that they are retired.

Was it still a bad deal after all these years?
jumppilot,

How many people can confidently say that they will have a stable job living in the same city for 20+ years? Some do. But, many of us don't.

And, how many of those confidently think that in 2000 and found out that they were wrong? They will not be posting in this forum if that happened to them.

KlangFool

Your response is not really keeping with the theme of what OP is asking. Do you thinking timing or “time in” the real estate market is better?

However, to answer your question posed to me, I would keep the property as a rental if I had to move. That’s what I did over my career when I had job changes and had to move.

Over the last year I haven’t renewed leases and am liquidating my real estate positions. It has paid off handsomely so far, especially considering today’s market.

Many roads to Dublin, KlangFool.
KlangFool
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Re: Does "time in the market beats timing the market" apply to housing?

Post by KlangFool »

jumppilot wrote: Sun May 16, 2021 5:00 pm
KlangFool wrote: Sun May 16, 2021 4:16 pm
jumppilot wrote: Sun May 16, 2021 3:32 pm
hammer10k wrote: Sun May 16, 2021 9:24 am I've read numerous Bogleheads forums on rentals, homeowning, plus a handfull of real estate books, but I still can't decide if "time in the market beats timing the market" does or does not apply to housing.
Time in the market always.

Hypothetical investor way overpaid for a SFH back in 2000, in a stable city with a stable job market. Kicking themselves because they got caught up in the madness and overbid. However, they’ve kept the house. They are selling now because they want to move to their vacation home now that they are retired.

Was it still a bad deal after all these years?
jumppilot,

How many people can confidently say that they will have a stable job living in the same city for 20+ years? Some do. But, many of us don't.

And, how many of those confidently think that in 2000 and found out that they were wrong? They will not be posting in this forum if that happened to them.

KlangFool

Your response is not really keeping with the theme of what OP is asking. Do you thinking timing or “time in” the real estate market is better?

However, to answer your question posed to me, I would keep the property as a rental if I had to move. That’s what I did over my career when I had job changes and had to move.

Over the last year I haven’t renewed leases and am liquidating my real estate positions. It has paid off handsomely so far, especially considering today’s market.

Many roads to Dublin, KlangFool.
And, whatever you had done may not be possible for other. Aka, rent out your property when you move. Especially, in the middle of a recession.

My response is in line of the question. Given that we can't be sure that we will be in one place for a long time, there is no time in market for many of us as per the house.


KlangFool
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jumppilot
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Re: Does "time in the market beats timing the market" apply to housing?

Post by jumppilot »

KlangFool wrote: Sun May 16, 2021 8:16 pm
jumppilot wrote: Sun May 16, 2021 5:00 pm
KlangFool wrote: Sun May 16, 2021 4:16 pm
jumppilot wrote: Sun May 16, 2021 3:32 pm
hammer10k wrote: Sun May 16, 2021 9:24 am I've read numerous Bogleheads forums on rentals, homeowning, plus a handfull of real estate books, but I still can't decide if "time in the market beats timing the market" does or does not apply to housing.
Time in the market always.

Hypothetical investor way overpaid for a SFH back in 2000, in a stable city with a stable job market. Kicking themselves because they got caught up in the madness and overbid. However, they’ve kept the house. They are selling now because they want to move to their vacation home now that they are retired.

Was it still a bad deal after all these years?
jumppilot,

How many people can confidently say that they will have a stable job living in the same city for 20+ years? Some do. But, many of us don't.

And, how many of those confidently think that in 2000 and found out that they were wrong? They will not be posting in this forum if that happened to them.

KlangFool

Your response is not really keeping with the theme of what OP is asking. Do you thinking timing or “time in” the real estate market is better?

However, to answer your question posed to me, I would keep the property as a rental if I had to move. That’s what I did over my career when I had job changes and had to move.

Over the last year I haven’t renewed leases and am liquidating my real estate positions. It has paid off handsomely so far, especially considering today’s market.

Many roads to Dublin, KlangFool.
And, whatever you had done may not be possible for other. Aka, rent out your property when you move. Especially, in the middle of a recession.

My response is in line of the question. Given that we can't be sure that we will be in one place for a long time, there is no time in market for many of us as per the house.


KlangFool
Perfect. Then rent. Problem solved.

And make sure you have bonds in case you become unemployed.
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Harry Livermore
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Re: Does "time in the market beats timing the market" apply to housing?

Post by Harry Livermore »

Real estate, as a market, is localized, and each property is like its very own common stock. And timing matters too!
So I think "time in the market", while it may apply, is too broad a guideline to apply to a single property.
Cheers
59Gibson
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Re: Does "time in the market beats timing the market" apply to housing?

Post by 59Gibson »

Harry Livermore wrote: Mon May 17, 2021 5:14 am Real estate, as a market, is localized, and each property is like its very own common stock. And timing matters too!
So I think "time in the market", while it may apply, is too broad a guideline to apply to a single property.
Cheers
+1 Have to agree it's too broad. So many moving parts- reasons, fin. factors, and personal choices as to whether buying or renting is best.
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Re: Does "time in the market beats timing the market" apply to housing?

Post by Golf maniac »

KlangFool wrote: Sun May 16, 2021 10:03 am
hammer10k wrote: Sun May 16, 2021 9:24 am I've read numerous Bogleheads forums on rentals, homeowning, plus a handfull of real estate books, but I still can't decide if "time in the market beats timing the market" does or does not apply to housing.
hammer10k,

It does not. The real estate market is local and it has a very long cycle. For example, someone could buy a house at the peak in 2004/2005 and the price may not recover to the nominal level until 2019.

The best answer is do not treat your house as an investment. If you have to consider your house as an investment, you had bought too much house.

KlangFool
+1. Klang nailed this one. A house is not an investment and should not be treated as one. If you want the lifestyle then you buy it and take whatever up or down the market provides.
rebellovw
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Re: Does "time in the market beats timing the market" apply to housing?

Post by rebellovw »

I believe your home is an asset that you must protect and maintain. It is absolutely an investment for me - in fact I'll divert money to the house - to maintain it - then when that is done (ex pay cash for new roof) - I divert back to investments.

I've sold 3 properties in my lifetime - and I've always done well - and time in - owning them a long time - made the return on investment all the better.

But I have been lucky at buying at the right time (downturns - or flat - no crazy times like the times today.)
Lee_WSP
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Re: Does "time in the market beats timing the market" apply to housing?

Post by Lee_WSP »

A house should be treated as a consumption item. As such, while the saying may have a lot of parallels, ultimately, they're two different things and you can't apply the saying to the housing market.
randomguy
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Re: Does "time in the market beats timing the market" apply to housing?

Post by randomguy »

Golf maniac wrote: Mon May 17, 2021 2:26 pm
KlangFool wrote: Sun May 16, 2021 10:03 am
hammer10k wrote: Sun May 16, 2021 9:24 am I've read numerous Bogleheads forums on rentals, homeowning, plus a handfull of real estate books, but I still can't decide if "time in the market beats timing the market" does or does not apply to housing.
hammer10k,

It does not. The real estate market is local and it has a very long cycle. For example, someone could buy a house at the peak in 2004/2005 and the price may not recover to the nominal level until 2019.

The best answer is do not treat your house as an investment. If you have to consider your house as an investment, you had bought too much house.

KlangFool
+1. Klang nailed this one. A house is not an investment and should not be treated as one. If you want the lifestyle then you buy it and take whatever up or down the market provides.
-1. Worldcom and Enron also haven't hit 2004 highs either. So does that mean that time in market isn't enough for stocks either? The problem the homeowner is facing is diversification. Unfortunately there is no really good way (REITs are not the same) of owning say 500 houses throughout the US so you get average returns. You can buy a house or a stock that never goes up no matter how long you live there.
123
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Re: Does "time in the market beats timing the market" apply to housing?

Post by 123 »

The high transaction costs of home ownership/acquisition can often make home purchase a bad idea unless you anticipate living in the home for at least 7 to 10 years. All the things you got for "free" when you bought the home (fresh paint, nice flooring, nice cabinets, fresh landscaping) are often the things you have to pay for when you pass the home along to the next buyer.
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Dennisl
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Re: Does "time in the market beats timing the market" apply to housing?

Post by Dennisl »

I think the closest comparison is a sector fund. If you have a house in a big city near good public schools, you'll probably do fine with time. If you live in an area where a major industry has left and things are falling apart, time in the market might just mean more depreciation. I tend to agree with Klangfool. Don't buy more house than you can afford. Don't assume the house will increase in value, because it possibly may not.
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Re: Does "time in the market beats timing the market" apply to housing?

Post by Golf maniac »

123 wrote: Tue May 18, 2021 2:58 pm The high transaction costs of home ownership/acquisition can often make home purchase a bad idea unless you anticipate living in the home for at least 7 to 10 years. All the things you got for "free" when you bought the home (fresh paint, nice flooring, nice cabinets, fresh landscaping) are often the things you have to pay for when you pass the home along to the next buyer.
+1. This is so true. On our first two homes we owned them less than 5 years and lost a little on both when you take transaction costs, taxes, and make into account. Only on our third home which we owned for 12 years did we make some money. But again, it was not a great investment when we took out all the costs of ownership.
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Re: Does "time in the market beats timing the market" apply to housing?

Post by Olemiss540 »

Golf maniac wrote: Wed May 19, 2021 2:49 pm
123 wrote: Tue May 18, 2021 2:58 pm The high transaction costs of home ownership/acquisition can often make home purchase a bad idea unless you anticipate living in the home for at least 7 to 10 years. All the things you got for "free" when you bought the home (fresh paint, nice flooring, nice cabinets, fresh landscaping) are often the things you have to pay for when you pass the home along to the next buyer.
+1. This is so true. On our first two homes we owned them less than 5 years and lost a little on both when you take transaction costs, taxes, and make into account. Only on our third home which we owned for 12 years did we make some money. But again, it was not a great investment when we took out all the costs of ownership.
Curious if you counted anything for imputed rent? Obviously breaking even would be amazing after 5 years of a roof over your heads compared to rent.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
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Re: Does "time in the market beats timing the market" apply to housing?

Post by humblecoder »

hammer10k wrote: Sun May 16, 2021 9:24 am I've read numerous Bogleheads forums on rentals, homeowning, plus a handfull of real estate books, but I still can't decide if "time in the market beats timing the market" does or does not apply to housing.
If you are talking about real estate as an investment (ex: investing in a REIT, etc), then I would agree that it applies.

If you are talking about real estate as a place to live, then I would say that it does not apply, generally speaking.

Unless you are homeless or are able to live rent free, then you need to be "in the market" pretty much continuously, either through paying rent or buying/maintaining a place as an owner. I suppose you can "time the market" in the sense that if rents are sky-high, you can decide to live in your car in a parking lot until the rental market crashes. However, I don't think that is a palatable option for most people.
rich126
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Re: Does "time in the market beats timing the market" apply to housing?

Post by rich126 »

People get heated with "timing" threads. To me "timing" simply means avoiding extremes. No one is going to time things exactly at the bottom or the top but I think in many cases you can tell when things are in the upper 30% or bottom 30%.

I'll give you a specific example since I was living in Arizona mostly from 2001 to late 2011 and kept my place until 2020. Arizona hit a huge boom and I saw housing prices in my neighborhood go from $300K to $600-700K peaking around 2008. Then from 2008 until late 2011 or 2012 prices fell until that same house was back to $300K. That house did not get back to the $600K+ range until mid 2020.

So in that case if you bought at the peak, you would have had to wait a good 12 years just to get even and if a job situation forced you to move earlier you could have lost $100-300K (and a lot of people simply walked away from homes).

Now that house has continued to increase in this crazy market to over $700K. Personally I think anyone buying right now in that area should expect a decent size price drop and it could take years to get back even. If you never plan to move, then maybe it is ok but jobs and family situations change.

Obviously very location dependent. Some people say prices in CA haven't dropped. I don't live there but I know that certainly isn't true for all of CA because I've talked to people who in past years had serious trouble selling CA homes which to me seemed strange since I always figured the market was always good.

I just find the doctomy at BHs amusing. They don't market time but they rebalance. Different term but rebalancing means to adjust due to prices getting out of whack. Housing is like most things, if you know the area you have a good idea when things are high or low. Will you be right 100% ? No, but more often than not. In life you look, think, and make a decision. No one is right 100% of the time but I get the impression too many people here are afraid of making a decision because of a fear of being wrong so they always have to go with the flow. To each their own.
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Re: Does "time in the market beats timing the market" apply to housing?

Post by KlangFool »

rich126 wrote: Thu May 20, 2021 9:48 am
Housing is like most things, if you know the area you have a good idea when things are high or low. Will you be right 100% ? No, but more often than not. In life you look, think, and make a decision. No one is right 100% of the time but I get the impression too many people here are afraid of making a decision because of a fear of being wrong so they always have to go with the flow. To each their own.
rich126,

The problems are

A) Housing market has a very long cycle: 10 to 20 years.

B) Many folks only look at the last few years. It had been up for the last few years. So, it can only go up. FOMO

The information and data is out there. Some people need to step back and look at the longer trend for their specific area.

KlangFool
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Cycle
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Re: Does "time in the market beats timing the market" apply to housing?

Post by Cycle »

Very location dependent.

If you want to downsize to a single level condo, good deals on condos now

I recently nabbed a 2400sqft townhome for 50k under taxable value on the edge of our downtown. Usually these homes sell for $150k more.

I'm selling a condo simultaneously, and am pricing it low, though I'm not sure I'll even see any offers. May end up being a landlord again.

Meanwhile in the car dependent parts of the metro there are bidding wars for 1950s 1400sqft houses that have the charm of shipping containers.

I think there's a timing aspect to real estate. There may be long periods of depreciation where you need to exit for a loss due to circumstances outside your control. Many small farm towns are simply unincorporating in our state. Homes there have depreciated to the point where people just board if up and walk away.
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Re: Does "time in the market beats timing the market" apply to housing?

Post by Golf maniac »

Olemiss540 wrote: Wed May 19, 2021 4:32 pm
Golf maniac wrote: Wed May 19, 2021 2:49 pm
123 wrote: Tue May 18, 2021 2:58 pm The high transaction costs of home ownership/acquisition can often make home purchase a bad idea unless you anticipate living in the home for at least 7 to 10 years. All the things you got for "free" when you bought the home (fresh paint, nice flooring, nice cabinets, fresh landscaping) are often the things you have to pay for when you pass the home along to the next buyer.
+1. This is so true. On our first two homes we owned them less than 5 years and lost a little on both when you take transaction costs, taxes, and make into account. Only on our third home which we owned for 12 years did we make some money. But again, it was not a great investment when we took out all the costs of ownership.
Curious if you counted anything for imputed rent? Obviously breaking even would be amazing after 5 years of a roof over your heads compared to rent.
Basically, P+I replaced our rent cost in first two homes so that was a wash. We did gain a little bit of equity by making monthly payments, but that little bit of equity was overwhelmed by the taxes, insurance, upgrades, and maintenance expenses. Most people will say I bought a home for $200k and I sold it 10 years later for $300k and made $100k. They forget about all the taxes, maintenance, and upgrades they made on the home.
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Re: Does "time in the market beats timing the market" apply to housing?

Post by crossbow »

Olemiss540 wrote: Wed May 19, 2021 4:32 pm
Golf maniac wrote: Wed May 19, 2021 2:49 pm
123 wrote: Tue May 18, 2021 2:58 pm The high transaction costs of home ownership/acquisition can often make home purchase a bad idea unless you anticipate living in the home for at least 7 to 10 years. All the things you got for "free" when you bought the home (fresh paint, nice flooring, nice cabinets, fresh landscaping) are often the things you have to pay for when you pass the home along to the next buyer.
+1. This is so true. On our first two homes we owned them less than 5 years and lost a little on both when you take transaction costs, taxes, and make into account. Only on our third home which we owned for 12 years did we make some money. But again, it was not a great investment when we took out all the costs of ownership.
Curious if you counted anything for imputed rent? Obviously breaking even would be amazing after 5 years of a roof over your heads compared to rent.
Wouldn't you then need to compare how much equity growth you got from the house (if any) to the opportunity cost of growth of investments with spare cash from renting (e.g. 20% deposit plus monthly difference in cashflow)?
Olemiss540
Posts: 1695
Joined: Fri Aug 18, 2017 8:46 pm

Re: Does "time in the market beats timing the market" apply to housing?

Post by Olemiss540 »

crossbow wrote: Thu May 20, 2021 3:59 pm
Olemiss540 wrote: Wed May 19, 2021 4:32 pm
Golf maniac wrote: Wed May 19, 2021 2:49 pm
123 wrote: Tue May 18, 2021 2:58 pm The high transaction costs of home ownership/acquisition can often make home purchase a bad idea unless you anticipate living in the home for at least 7 to 10 years. All the things you got for "free" when you bought the home (fresh paint, nice flooring, nice cabinets, fresh landscaping) are often the things you have to pay for when you pass the home along to the next buyer.
+1. This is so true. On our first two homes we owned them less than 5 years and lost a little on both when you take transaction costs, taxes, and make into account. Only on our third home which we owned for 12 years did we make some money. But again, it was not a great investment when we took out all the costs of ownership.
Curious if you counted anything for imputed rent? Obviously breaking even would be amazing after 5 years of a roof over your heads compared to rent.
Wouldn't you then need to compare how much equity growth you got from the house (if any) to the opportunity cost of growth of investments with spare cash from renting (e.g. 20% deposit plus monthly difference in cashflow)?
Not really a fair comparison considering the risk involved with equities versus mortgage paydown. No one invests in personal real estate for a higher return, they do if for a place to live and an inflation hedge.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
crossbow
Posts: 290
Joined: Mon Nov 12, 2018 6:47 pm

Re: Does "time in the market beats timing the market" apply to housing?

Post by crossbow »

Olemiss540 wrote: Thu May 20, 2021 8:44 pm
crossbow wrote: Thu May 20, 2021 3:59 pm
Olemiss540 wrote: Wed May 19, 2021 4:32 pm
Golf maniac wrote: Wed May 19, 2021 2:49 pm
123 wrote: Tue May 18, 2021 2:58 pm The high transaction costs of home ownership/acquisition can often make home purchase a bad idea unless you anticipate living in the home for at least 7 to 10 years. All the things you got for "free" when you bought the home (fresh paint, nice flooring, nice cabinets, fresh landscaping) are often the things you have to pay for when you pass the home along to the next buyer.
+1. This is so true. On our first two homes we owned them less than 5 years and lost a little on both when you take transaction costs, taxes, and make into account. Only on our third home which we owned for 12 years did we make some money. But again, it was not a great investment when we took out all the costs of ownership.
Curious if you counted anything for imputed rent? Obviously breaking even would be amazing after 5 years of a roof over your heads compared to rent.
Wouldn't you then need to compare how much equity growth you got from the house (if any) to the opportunity cost of growth of investments with spare cash from renting (e.g. 20% deposit plus monthly difference in cashflow)?
Not really a fair comparison considering the risk involved with equities versus mortgage paydown. No one invests in personal real estate for a higher return, they do if for a place to live and an inflation hedge.
What I meant was - say you broke even after selling your house. You can console yourself by thinking about the rent you saved since you didn't rent (net gain). But you can also feel worse by thinking about the opportunity cost of money tied up in the house which you didn't invest (net loss).
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