Do you want to invest in your first or next property, but find yourself wondering if you should wait for “the crash” before jumping in? If so, you’re not alone. I’ve talked to countless people—from experienced investors to my personal friends and family who are just looking for a primary residence—who are all questioning whether they should buy now or “wait for the crash.”
This is a natural question. No one wants to buy at the height of the market, only to see property values decline for a few years. However, this question also demonstrates a fundamental misunderstanding of the normal cycles in the housing market. The housing market doesn’t actually “crash” on a regular basis, and the belief that it does is preventing people from making sound investing decisions.
In my opinion, the basis of this crash fear lies in the trauma of living through the Great Recession and housing collapse in the late 2000s. I call it “housing market trauma”—not in an attempt to make light of it—but rather to give a name to something experienced by many.
How normal economic downturns affect our investing decisions
I completed my undergraduate degree in the spring of 2009, which was, at the time, the worst job market we’d seen since the Great Depression. (Sadly, I think the class of 2020 now holds that unfortunate record.) And, the events that occurred due to the Great Recession significantly impacted my financial outlook and decision-making.
At that point, it was very difficult for me to find work and support myself post-college. As such, that experience shaped the decisions about the jobs I’ve taken—as well as my decision to obtain a graduate degree to ensure I was employable. And, it also directly impacted my decision to start investing in real estate at a young age, which was done in order to generate multiple sources of income.
And, these types of economic events haven’t just impacted me. They’ve impacted the way we all make…