Let's take a look at an example real estate market and see how real estate timing works. The proof is in the pudding, as they say, and this will show you how the real estate timing charts will help you determine when to buy and when to sell. This is how you make money in real estate.
Here are part of the charts for the Orlando Florida real estate market going through 2007. The first is the real estate timing market momentum chart for Existing Home Sales. The second is the real estate timing market momentum chart for New Home Building Permits.
The simplest way to interpret these charts is to understand that the line that runs horizontally across the chart is the zero line. When the momentum reading goes above that zero line it's an indicator pointing towards buy. When the line goes below the zero line it's an indicator pointing towards selling.
It's important to keep in mind that it takes more than one indicator crossing the zero line to prod us into action. In this case the first time we cross the zero line going up is late 1996 and early 1997. When the second indicator crosses the zero line going up it shows us it's time to buy in the Orlando real estate market. As you can see the Orlando real estate market stays healthy for quite some time.
If you look at the New Home Building Permits market momentum chart for real estate timing you'll see that around early 2000 to mid 2001 we kind of hover around the zero line. However, because the Existing Home Sales Market Momentum chart is still well above the zero line we aren't getting an action signal. Again in mid 2005 the market momentum for New Home Building Permits starts to hover around the zero line again. It isn't until 2006, however, that the Existing Home Sales crosses the zero line. Now we have these two indicators pointing towards selling so it's time to take action. And you can see after that both charts go well below the zero line all the way through the end of 2007.
Let's take a look at the Median Home Sales Price for the Orlando Florida real estate market for this same time period to see how the market indicators are reflected in the home prices.
As you can see before we get the first buy signal the Orlando real estate market is pretty flat as shown by the red line. After we get the buy signal from the market momentum charts home prices start going up and up and up. Finally after a very healthy amount of appreciation the market momentum charts point to selling. You can see that after this home prices still go up for a little bit but then about 1 year after that they start to drop after peaking. This is good because it gives us time to get out of the market before we reach the peak.
The market momentum charts have shown us clearly when to buy and when to sell! We can see how the real estate timing charts are reflected in the home sales prices.
None of this risky speculation that cost so many people so much money.
The charts told us it was time to buy in early 1997 and the prices went up. Then they told us it was time to sell in 2006 and after that the prices went down.
As you can see these charts only go through the end of 2007. If you want to find out what is going on in the Orlando real estate market or any other of about 230 real estate markets tracked by REMarketStats across the country visit our website to see more about real estate timing in the markets you are interested in.
Also if you want to learn more about how to analyze the real estate timing market momentum charts or want to see more examples of other markets go to the free video training on our website, REMarketStats video training.
See this post at it's original source (with larger images too) at http://remarketstats.com/blog/real-estate-timing-orlando-florida-example/
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