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Many analysts believe that timing the stock market is impossible. This is in large part because of the vast amount of data available instantaneously to any investor. Data on individual stocks is available not only daily but nearly real-time on-line and there are numerous indexes. Consequently, the stock market is considered by many to be a “perfect” or “efficient” market.

Perfect vs. imperfect markets
Contrast this with the real estate market. There is no meaningful national index equivalent to the Dow Jones, NASQC, or S&P 500. The real estate industry traditionally only has monthly updates. These indexes are based on closed transaction, which reflects the real estate market conditions that were present 50 to 115 days ago. Definitely a far cry for the near real time on-line stock quotes. There are even situations when apparently similar indexes are reporting different results. Clearly confusing the typical consumer. This lack of consistent reliable information creates an imperfect market for the real estate industry.

It is this imperfect market that Creekside Realty utilizes. Creekside Realty analyzes the real estate market on a daily basis and reports a summary of this data weekly and monthly. This frequency of updated data provides a source of consistent useful data allowing readers of the weekly BAREMN to improve their reel estate investment returns.

Timing
Timing is important in real estate. The high cost to buy and sell real estate combined with the inconvenience of moving combine to make it rare for Creekside Realty to recommend a purchase or a sale that was not otherwise planned. If the total cost to sell and repurchase is 9% the market must fall 9% (which is rare) just to break even. Instead Creekside Realty’s goal is to improve the timing for transactions that are contemplated for other reasons. However, with the $250,000 per person federal income tax exclusion it may make financial sense for people to buy and sell especially if they are over 55 and therefore eligible to transfer their low property tax basis.

Creekside Realty’s market indicators tell you to buy and sell according to market trends. The best part, they warn you 3 months prior to the change being perceived. This corresponds to the 80 days identified above plus time for the public to react to the new information. You will know when to buy before prices start to move higher. And you will know when to sell before prices start to fall. The best part is the 3-month warning gives you enough time to market or locate the property.

The consumer generally does not recognizing the bottom of a recession as they don’t recognize the top of a boom. The weekly BAREMN helps Creekside Realty’s client recognize the valleys or peaks and utilize this to improve the return on their investment.

The informed Buyer or Seller learns how to minimize the risks. The long-term trend for real estate favors higher prices. The trouble with trends however is they go one direction for a period of time and then stop and go another direction for a time. Timing helps ensure that you use these shifts to enhance your investment.

Can the real estate market timing indicators also determine what the real estate market is going to do one, two or five years in the future? Unfortunately, no! The market indicators only look 3 months ahead. These indicators are like headlights on a car. They can only shed light down the road only so far, but not forever. These market indicators are based on actual market activity and measure the acceleration and deceleration of market trends. This is often called a technical analysis opposed to a fundamental analysis that evaluates factors that impact the real estate market such as interest rates, unemployment. Technical analysis takes advantage of the theory that the entire market is smarter than any subset. Additionally, if a fundamental model were successfully developed, it would change the market dynamics causing the model to be inaccurate. On the other hand, a technical analysis such as supply and demand remains unchanged.

Most investors know that timing is important, yet timing has not been widely utilized for real estate investments

Technical Analysis
Creekside Realty uses technical indicators such as supply, demand, marketing time, volume, and lastly price to determine market conditions. A technical analyst is only concerned about movements and patterns of the market data and not the causes behind these changes. It is only important to know how the market is changing and not important to know why the market is changing.

A technical analysis can detect the market slowing down even as it continues moving in a given direction. Using the BAREMN alerts you to a change in trend opposed to signaling only when the market reversal of a trend. The real estate market indicators provide you advance notice of changes in the real estate market.

Any technical analysis clearly will not warn of unpredictable non-economical events such as the invasion of Kuwait in 1991 or the events of September 11th. Although a technical analysis could not have predicted either of these events, Creekside Realty was already recommending a sale at the time of both of these events because of previous market activity. Consequently, neither of these unpredictable events changed our recommended strategy. This will not always be the case for sudden and unexpected non-economic events.

The technical analysis acknowledges that the ultimate real estate Guru is the market itself. Most sources looks at only a subset of this data and does so only monthly. If it takes at least three data points to detect trend changes and the data is only gathered monthly, it would require at least 2 months and 1 day to detect a change. 

Frequency of data updates
Another important factor is having sufficient number of data points over time in order to identify cyclical patterns. Using data updated daily provides Creekside Realty sufficient data to accurately identify the cyclic patterns. Compare this with the vast majority of the indicators that gather data only monthly.

Most real estate indexes are only updated monthly and don’t adjust for a 28, 30 or 31 day month. This has caused the media to report a 5% decrease in sales from January to February but completely failing to mention that there was a 10% decrease in the number of days during the reporting period. Sales per day actually increased by 5%.

Daily frequency provides 7 data points for each weekly edition of the BAREMN. Market changes are very apparent and can easily be pinpoint with daily data.

Delayed data
Further more most tradition data is based on closed transactions and are not released around the 25th of the month following the month of closing. This means that the data is outdated by 25 + 40 + 15 or 80 days. Compare this with data that is available daily.

Distribution
Those who are successful at market timing aren’t going to do television and newspaper interviews just before the crash. This is because if the data were widely known it would become useless. This is why the weekly edition of the BAREMN is available only to Creekside Realty’s clients. The monthly BAREMN is widely distributed and although it contains more detailed information than any other source we are aware of, the monthly edition doesn’t contain all the market indicators and the data is clearly more dated when published than a weekly edition. This means readers of the weekly BAREMN have a significant additional advantage as the data is much more current and contains more of the market indicators.

If you want be more successful in real estate, let the market be your advisor and tell you what to do by using the weekly BAREMN. BAREMN will allow you to use the market data to predict the rise and fall of real estate prices. The data is the voice of the market giving you clear signals about when to buy and sell.

Market equilibrium
Bay Area real estate cycles shows that the market is rarely in equilibrium. This is due in part to the time lags for the market to identify changes. This lack of equilibrium helps explain why the real estate market is rarely in balance and is almost always favoring either the Buyer or Seller.

There are frequently significant differences between different real estate markets. Real estate is local and cannot be moved. Even within a given market there are sub-market differences based on geographic, price, and type of property. Therefore, it is critical to make your decisions based on local and customized data. Creekside Realty provides this detailed custom information to clients actively considering a real estate transaction.

Creekside Realty’s clients have an advantage when buying or selling Bay Area real estate. Creekside Realty uses proven market indicates to tell our clients when to buy or sell real estate to increase their profits. These market indicators have accurately predicted all major trends since 1992.

Creekside Realty’s data also provides an objective source to assist in the decision making process. This is extremely helpful as it’s nearly impossible to find a bearish forecast at the peak and likewise difficult to find a bullish forecast at the bottom. Contrast this with Creekside Realty was bullish in November 1998, bearish in January 2001, bullish in November 2001, and bearish again in May 2002.

Original research
Real estate market timing is simple but only after the market indicators are developed. However, developing the market indicators is a time consuming process. Creekside Realty developed their market indicators in an effort to improve the return on our own personal real estate investments.

The market indicators used are all based on Creekside Realty’s original research. Creekside Realty knows of no other source generating these indicators. Although some have attempted to duplicate the data, none have been able to duplicated Creekside Realty’s 90-day Market indicator. This explains why Creekside Realty is the source most frequently used by the media including: Forbes Magazine, San Jose Mercury, San Jose Magazine, Santa Cruz Sentinel, San Mateo Times, Silicon Valley Business Journal, Silicon Valley Biz Ink, Realty Times, Deadline News, and numerous others.

General advice
A first time homebuyer wanting to purchase during a market down trend might want to rent and wait until the market nears the bottom. Then they can buy at even cheaper prices. A move-up homeowner might want to sell and then rent. Unfortunately this requires two moves, which is unpleasant. Move up buyers only benefit delta prices and therefore typically benefit less than the first time buyer. If prices are increasing the Buyer may want to accelerate their purchase and a seller not re-investing may want to wait until price approach their peak. If moving to a new area the appreciation rates of the two areas should be compared. With the new tax laws, homeowners can sell their home every two years and the profit is tax-free forever. This is a significant tax benefit worth considering. This new tax exclusion may tend to increase the frequency of transactions.

Don’t try to think about what the market is going to do. You have absolutely no control over the market. Instead, think about what you are going to do in response to the changes in the market. You do have control over your response to the market.

Prices
Besides suggesting timing, Creekside Realty’s market indicators can assist Sellers and Buyers in determining when to be conservative and when to be aggressive on their pricing strategy.  Buyers also know when to settle for an 80% homes and when to wait for their perfect home. It also assist the move-up client determine when the market is more stable making the trade up move that requires both a sell ad purchase less stressful.

Investment returns
Owning real estate can reward you with some of the biggest payoffs you’re likely to ever get in any investment market. Real estate can be a wonderful money making machine. You can improve your return by knowing when to buy and sell. Frequently, improving the investments is changing the timing by a matter of a just a few months.

In fact, because the changes are so rapid traditional monthly data doesn’t allow you to notice the change until it is too late. Check out how significant and rapid these recent price fluctuations that occurred in Santa Clara County are:

prices increased 19.1% in 4 months or +4.8%/month in early 1998
prices decreased 10.5% in 4 months or -2.6%/month in mid-1998
prices increased 16.0% in 4 months or +4.0%/month in early 1999
prices increased 41.8% in 5 months or +8.4%/month in early 2000
prices decreased 9.8% in 5 months or -2.0%/month in mid 2000
prices increased 14.4% in 4 moths or +3.6%/month in late 2000
prices decreased 16.7% in 9 months or -1.9%/month in 2001
prices increased 17.1% in 4 months or +4.3%/month in 2002

Wouldn’t it be nice to delay a sale by four months to recognize an additional 15% increase in price. This could increase the Seller’s proceeds significantly. After paying off the loans, which remain a fixed amount. This 15% increase could double a Seller’s profit. Currently, holding costs are only about ¾% per month. So even if the property sat vacant, the net increase would still be 12%. That is $60,000 for the median priced home in the Bay Area, for waiting just 4 months.

The market can reward you with spectacular profits on the upside. The market can also punish you with losses on the downside. Fortunately the downward slide appears to be about half the rate of the increase. The slower decline is in part caused by Seller’s refusal to accept the fact their real estate is worth less. This will tend to cause the volume of sales to decrease during periods of falling prices. It can't be said enough time to maximize your profits, you must be aware of and take advantage of market trends.

Real estate is a great long-term investment for accumulating wealth for the average American. Most large fortunes were either started or expanded with real estate. Had you bought good quality real estate three or four decades ago, you would not be concerned with your financial future today. It is one asset that has kept up with inflation and has steadily appreciated. Creekside Realty’s data allows you to improve the long-term investment aspect of real estate by adjusting the purchase and sales dates to maximize the profit based on market conditions.

Real estate is not always an easy game. There are significant risks and dangers along the way. Real estate moves in cycles, prices will rise and prices will fall. Most of us have little difficulty when times are good. It’s when times are bad that we get tested. Fortunately, market extremes do not last.

Advice
Falling prices allows the Buyers to be very selective. But if homes were increase by $5,000 per week it would be wise for the Buyer to purchase ASAP even if less than perfect property in order to capture the appreciation to avoid getting priced out of the real estate market.

While you can’t avoid market corrections, you can be prepared for them. The BAREMN was developed to help you anticipate these market changes so you can profit from them opposed to being blind-sided by them.

One of the best ways to analyze the facts in order to maximize your returns in real estate is to invest using market trends. For example, if the trend is likely to move real estate prices higher accelerating your purchase plans. If the trend is likely to move real estate prices lower you accelerate your marketing efforts.

While this over-simplification obviously ignores the specific circumstances of individual real estate investors, be certain of this: all the hoping in the world is not going to change the trend of the real estate market. How accurately an investor can identify real estate trends and changing trends will likely be a factor for determining how much profit they make in real estate.

If you want to know how to identify trends in the real estate market, read the weekly BAREMN. The real estate market indicators in the weekly version were developed to guide our own real estate investments. Our profits have improved using these market indicators.

Real estate investors are often guilty of failing to analyze market facts before making buying and selling decisions. In addition to assisting with marketing timing, BAREMN lets you know when to be conservative and when to be aggressive with your pricing strategy.

Ironically, as a real estate investor, your past successes can be the biggest reason for your eventual downfall. Real estate investor can get careless by becoming overconfident. After years of appreciating property values investors start to think that making money in real estate is a sure thing. Whatever the reason, many stop analyzing the facts. Consequently, they don't sell when they should have, the market turns south, and real estate prices start falling. This is why it is critical to constantly know the market condition data.

It's true that you can make a lot of money in real estate. After all, that's why you invest. But it's also true, if you get caught in a bad market, that you can lose a lot of money in real estate.

The BAREMN provides you the critical information you need for making money in real estate. These market indicators tell you when to buy and sell for maximum profit. Using the BAREMN

1. You can better predict trend changes in the real estate market. It has warned about every market change since 1992.

2. You will have 3 months of early warning to prepare for coming real estate trend changes. This means you can buy low before anyone expects real estate prices to rise. This also means you can sell high before anyone expects real estate prices to fall. The BAREMN makes reader more informed about current real estate market conditions than the vast majority of the general public.

What are the best real estate indicators to follow? Creekside Realty’s market indicators are superior to other market timing indicators we are aware of. They literally let you comprehend the market with data updated daily vs. monthly. All investors should constantly ask themselves is what is the market telling me to do?

What are the big pitfalls most investors should try to avoid? This would be the temptation to follow the crowd. Investors have to do what is correct rather than what feels comfortable. Even though the markets look the best when prices are soaring, this is often the best time to sell. When the market couldn’t look worse is usually a market bottom and the best time to buy.

It is human nature that nobody wants anything when it is cheap and everybody wants it when it is expensive. To be a good investor, you have to be a contraire. This is especially true at major market turning points. Don’t fight the trend and don’t join the trend. Instead lead the trend. The BAREMN helps you to do this.

Questions and Answers
How can market indicators identify a change in the market before it actually happens? By using the technical analysis, it’s possible to recognize when the market starts to decelerate. Therefore, it’s possible to determine when the market starts to weaken even as prices are still going up.

How will you know the optimal time to buy and sell? You will base your decisions on what market indicators tell you the market is doing. So the secret for increasing your real estate profits is simply to let the market itself be your guide. You’ll feel more confident and less worried about securing your financial future.

Do you know when its smart to sell and take profits? The biggest secret for winning in real estate or the stock market for that matter is to ride an up-trend for as long as possible and then sell before the trend changes.

What is the advanced warning indicator? It gives you advance notice of the likelihood of a major changes in the real estate market is approaching. Days to sell inventory, is such an advanced warning indicator to changes in trend. DSI starts the warning before prices began to change. DSI is measure of the supply/demand balance, which is the foundation of the free economy. DSI gives investors the most time to prepare for major trend changes in the real estate market.