People have important reasons for buying or selling property and usually it isn’t about making money. There are the happy reasons such as young people striking out on their own, marriages and births, there are business reasons like a change of job location, and there are the not-so-happy reasons such as redundancy, divorce or a death in the family.
For those entering the market, especially for the first time, it is important to understand that the property market works in a cyclical pattern and generally follows an emotional, seven-stage format.
The first stage is optimism, the period when many people get excited about buying a home. When the market is strong property increases quickly in value, and this heralds the second stage – fever pitch. Sadly it is this gold rush excitement that leads people to make rash and sometimes unwise decisions and these in turn lead to a downward cycle. At first nobody wants to believe that the bubble has burst and that their own property can lose value, even when all others have. This is stage three, denial.
Then comes fear and panic as prices continue to slide. This is followed by stage six, resignation. Finally, acceptance leads to hope and from hope we are back to optimism. And so the property merry-go-round is complete. The secret is to understand which stage of the cycle prevails when you come to market.
Just like stocks and shares there are good times in the property market to buy, hold or sell. But the real drivers in buying and selling are still deaths, births, confidence and taxes. Unlike the stockmarket, there are many more personal reasons why sometimes buying, holding or selling property just can’t be achieved at the optimum moments.
Everyone wants to achieve the best price for their property and an uncomplicated sale and purchase in the shortest time possible. But achieving a good sale price is usually connected with paying a high purchase price or vice versa. So in the end, it doesn’t matter much if the market is falling or rising – whether it’s a buyers’ market or a sellers’ market - things have a habit of evening themselves out in the end.
The property market doesn’t always go up. Sometimes it goes the other way. It is never easy to come to terms with the loss of some equity. But before long the desire to move on in life overcomes even the most steadfast seller when faced with the proposition that getting on is better than holding on – especially when what they are holding on to might be sinking.
So rather than trying to over-achieve in a sale or purchase when conditions are difficult it may be better just to get on with life. Like time and tide that wait for no man, life never waits for economic conditions in the property market to be perfect either.
At the end of the day surely what does matter is that you and your family are happy and safe in the home you have or the home you buy. The market will have its ups and downs but more importantly people will always leave the family nest, co-habit, get married, give birth, separate, divorce, secure new jobs, lose their jobs, win the lottery, hit the jackpot, need care and, sadly, die.
Life is always the best reason to determine whether to buy, hold or sell and no market condition will ever change that. Life and the property market always will go on.