Secrets of Timing in Real Estate Investing

If you want to protect your real estate investment as well as gain substantially from it, it is very important to know how to time the market for real estate investing. Market timing is crucial for any investment but it is more so in the case of real estate. Correct market timing in real estate yields huge profits and real estate tycoons like Donald Trump, Tom Barrack and Sam Zell are masters at it. The timing formula is actually very simple 'buy low and sell high'. However it is easier said than done. To be very good at timing the real estate market you should have a thorough knowledge of the types of real estate markets that exist and the actions you should take in each of them.

Although there are many variations real estate markets fall into three main categories. The seller's market, the buyer's market and neutral market. In simple terms, in tennis analogy, a seller's market is said to exist when it is 'advantage seller' or when the seller is is at an advantage, buyer's market is said to exist when it is 'advantage buyer' or when the buyer is at an advantage and a neutral market exists when it is 'love all' or neither buyer nor seller is at an advantage.

A seller's market:

In a seller's market there are more buyers than the real estate inventory available. As there are fewer homes available than the demand, all homes will eventually sell. Typically a seller's market is said to exist when there is much less than six month's inventory available. In strong seller's markets there is usually less than two month inventory available.

A buyer's Market.

A buyer's market is said to exist when there are more homes for sale than are buyers looking for them. In such a situation not every house will sell. Typically a buyer's market exists when there is more than six months inventory available on the market. This puts an upward pressure on prices.

A neutral market.