Buy Low Sell High. These are the rules to growing wealth. But do they apply to Real Estate? What happens when you’re buying to live in and selling whenever you grow out of that stage in your life, should you let this mantra decide these stages in your life?
Edmonton’s current residential real estate market is bad. The average Single-Family house average sale price in Edmonton based on the MLS Home Price Index (HPI) is currently standing at $367,000. In March of 2015 that average price was $401,500. In March 2007 the price was $375,000 – that was 12 years ago! It’s safe to say nobody is selling “high”.
So what’s the upside in selling low when it comes to real estate? Similar to stocks or other forms of investment, you’ve only lost or gained once you stop playing – once your money’s off the table then you’ve realized your gains or loses. If you sell your Real Estate currently and take your money off the table, it can be counted as a loss. If you sell now and buy again, you’ll simply be moving your money from one asset to another but you will not have taken your money off the table.
The unexpected benefit of selling your house in a bad Real Estate market is the opportunity to then buy in that same bad market! This is of course still a risky move, who knows if the market will ever recover, but at least you’re not out of the game.