How to Recognize Topping of the House Market

Much of real estate investing involves predictions: Is now the right time to buy or sell to make the most profit possible?

No one can tell for sure when a housing market has hit its peak, but the following signs are good indicators:

• High-priced deals will fall out of escrow, failing to seal the deal—sometimes for no apparent reason.
• Interest rates will rise significantly.
• The number of houses for sale will increase considerably.
• Sellers will be more likely to negotiate good deals, and buyers will rarely pay listing price.
• Lenders will become tougher when reviewing applications.
• Properties will stay on the market longer than usual.
• Problem properties and serious fixer-uppers will stop selling.

Real estate naturally ebbs and flows in multi-year cycles. Make sure you have the right tools as a landlord and you know what you’re getting into before you buy your next property.

In any real estate downturn, stay focused on the big picture; history has shown there are always deals to be made in both downturns and upturns for savvy and patient investors.