Would You Buy a House on Sale at the Supermarket?

When home prices are low, and sellers have trouble selling, most people don't seem to buy homes.

by Noel Peebles

February 21, 2004

Now, that sounds like the silliest question you’ve heard all week… maybe all year? Supermarkets don’t sell houses. Well, yes you’re right – supermarkets don’t sell houses. But, if they did… and if they had them on sale…would you buy one?

I know that sounds silly, but what I’m getting at is really important… especially if you are in the market to buy or sell a house. You see I want you to think about the way most of us go about buying and selling property.

Like it or not; how we buy and sell houses says a lot about human nature. We all like to be seen as individuals, but in a lot of ways, we are like sheep. Most of us would hate to admit that we have a herd (flock) mentality. However, when it comes to buying and selling property, most of us will do what everyone (well nearly everyone) else does.

Anyway, back to the supermarket. What would most of us do if the local supermarket had a big discount sale and dramatically reduced all its prices? What would us sheep do? That’s easy to answer. We would rush in and grab some bargains! We’d buy up large - wouldn’t we? Of course we would!

The funny thing is that when property prices, or share market prices fall - what do most people do? The exact opposite . . . we do nothing! We wait until the prices start moving up again!

When there are a lot of real estate signs hanging on front fences - houses take a lot longer to sell. When the news media tells us that the real estate market is dead - real estate agents go quiet.

So when the real estate market is depressed, instead of buying . . . most of us do nothing. This is usually a good time to buy. It is a buyer’s market!

A depressed market provides the opportunity to “buy low - sell high.” Yet, because of fear, most of us choose to “buy high – sell low” or “buy high – sell high.” We do the opposite to what we would do in the supermarket.

So, here are the questions: Should you sell when the real estate market is depressed or booming? Should you buy when the market is flat or rising? Well, I guess it depends on your own circumstances. You have to decide what’s best for you. You now know what most people will do – so it’s over to you whether you join the herd or not.

I will say this; for a first homebuyer, or an investor - usually the best time to buy real estate is when the market is depressed. Do some research, overcome any fears and “buy low – sell high.”

© Noel Peebles, Market Leaders ebooks.

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