1. Thinking you’re going to appreciate enough to turn around and sell for a profit in two years.
The last few years were remarkable. COVID-generated low interest rates and inflation caused buying power and values to soar.
For example, I had one client who bought in October 2019 and sold in September 2022 for a $431K gross profit. That’s plain bananas!
But that’s NOT normal. If you’re buying a primary residence or investment property now, temper your expectations about appreciation. While your property will likely appreciate over time (see past appreciation trends above), it will not likely spike to unprecedented levels like it did during COVID.
2. NOT purchasing because you’re waiting for prices to improve.
While rates will hopefully improve by the end of the year, housing prices (due to exceedingly low inventory) are not projected to lower significantly.
3. Forgetting the many benefits to homeownership above and beyond appreciation
—> Greater security
—> Tax benefits
—> Fixed monthly housing costs (as opposed to rent that is raised outside your control)