Quora asks: My mentor got wealthier in real estate during the 2008 market crash. What are the best ways to make money before, during and after a market crash, in real estate or other businesses?

Vicki Moore
Vicki Moore
Published on December 27, 2018

Can you handle going against the grain?

You have to be confident and strong enough, willing and able to go against what everyone else is doing, which is against who we are as humans. It’s really uncomfortable to be different and do different, especially when it comes to real estate and your friends and family asking you if you’re crazy.

Real estate is cyclical

The reason housing prices escalate to extremes in the Silicon Valley real estate market is the shortage of homes and because buyers are doing what everyone else is doing: They’re buying. For a long-term strategy, that’s fine. If do you buy high and don’t see an increase in value in the short term but plan to hold through the next real estate cycle, you’ll see a return on your money; but that’s not easy to do. To watch the value of your what is likely your biggest asset dump, you’ll have to white knuckle it through to the next upswing to get rid of the sick-to-your-stomach feeling.

Remember, real estate is cyclical: 7 to 10 years. Right now, we’re at the outside of a 10-year span. Based on the 7 to 10 year principle we should have already been into a downturn; but in Silicon Valley – and other markets throughout the US – the upward trajectory has gone on longer than expected pricing thousands more out of the market.

We’re still seeing multiple offers and over the asking price contracts. It’s on a more limited basis but this is not the time to be writing indiscriminately low offers. We may get to that point but we’re not there now.

The best time to buy real estate is when no one else is buying.

When no one else is buying is when you’re going to find what everyone is looking for: a deal.

In the late 1990’s and early 2000’s, the real estate market was hot; everyone was buying, the prices were outrageous. Buyers wanted to wait for the market to crash to get a good deal. The problem with that is it became very, very difficult to get mortgage loans, people lost their jobs and others, who had money, became scared to buy.

So you may be waiting for the opportune time when prices are at their all-time low but will the market be available to you?

How to get a deal on a house

If you want to take advantage of opportunities during a crash or downturn, you have to prepare yourself long in advance. Have a lot of cash and position yourself financially and emotionally to go against what everyone else is doing.

When is the best time to buy?

The best time to buy is when you’re ready: When you have a good credit score, the necessary downpayment and a long-term steady job. You can wait for a crash or wait to buy at the bottom, but that’s speculative. The only way to know if the market has bit bottom is when we look back and say, “Oh, yeah, that was it, there.” Timing the market is a risk that even experts get wrong.

Are you thinking of buying a home or selling your home in the North Silicon Valley Real Estate Market?   If you haven’t hired a top producing Peninsula real estate agent yet, contact me, and I’d be happy to help you navigate today’s Peninsula real estate market!

About the author:  The above post My mentor got wealthier in real estate during the 2008 market crash. What are the best ways to make money before, during and after a market crash, in real estate or other businesses?” was provided by Vicki Moore of RE/MAX Star Properties.

With over 20 years of experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise.

We service the following Northern Silicon Valley areas: San Bruno, Millbrae, San Mateo, Foster City, Redwood City, Pacifica, Burlingame, Belmont, San Carlos.

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