If there’s one thing real estate owners and investors know, it’s that you always have to keep your finger on the pulse, regarding property prices. Your asset’s value can rise sharply tomorrow, but it can also take a huge blow. There are a few tricks of the trade that can help you project fluctuations, but these are just projections at the end of the day.

With that in mind, there’s a difference between property owners, who see real estate as an asset and possibly a source for rent money, and investors, who consider real estate an opportunity to buy for a certain price and sell for a higher denomination. The latter, naturally, need to be more aware of volatility in the market.

There are some key signs that it’s time to sell and move on, and we’ve listed three of them here. However, you should keep in mind that this isn’t a scientific equation and that these signs are not guarantors for anything. Having said that, they can be useful, along with other considerations, when making a real estate related decision.

Tis the season…

Famous Russian poet Leo Tolstoy was quoted saying “spring is the time for plans and projects”, and apparently he was right when it comes to real estate. Statistically speaking, demand for residential real estate rises every spring. Maybe it’s the school year’s end in June that motivates people to move, or maybe it’s the fact that spring is considered a time for fresh starts.

A look at the real estate market in Conejo Valley, supplied by real estate agent Michael Rice, shows that the first months of 2020 were all characterized by a reduction in the amount of days it took to sell a home in the region, compared to the month before – and the same can be said about the beginning of 2019. That’s why it may be wise to sell before spring officially starts, maybe even to start looking for buyers toward mid-January. Also, we are talking solely about the residential market here, so if you’re a commercial or industrial property owner - keep reading.

A small world after all

While a lot of novice investors look at national current events to estimate what is going to happen to their property value, experts know to scan what’s going on around the globe. According to a projection recently released by the U.S. Chamber of Commerce, for example, a shortage in lumber is expected due to COVID-19 restrictions. Keep in mind that the U.S. is one of the major lumber exporters in the world, and if there isn’t enough lumber for the local construction industry, a cutback on exports is expected. Needless to say, this will slow down construction worldwide and raise demands (therefore raising prices).

There is, of course, a need to focus on some countries or regions around the world more than others. The housing crisis of 2008 started in the U.S. and quickly spread out around the globe but had the source of the problem been another region, the impact might not have been so substantial. A good rule of thumb is to keep a closer eye on larger, stronger and more populated countries and on what’s happening there.

All a matter of time

The aspiration of real estate investors is always to sell when property value is high, just as it starts declining, right? Wrong. Sometimes the right thing to do in response to a decline in value isn’t to sell, but rather take action in order to restore growth. For example, if property value declines due to a spike in criminal activity in the area, installing an alarm system may be the solution rather than rushing to sell. On the other hand, high value in real estate isn’t always an incentive to sell.

When asked why home prices have gone up in COVID-19 times, owner of the popular online real estate marketplace Zillow, Rich Barton, replied that “home buyers want more space and new areas while homeowners are hanging onto their homes amid pandemic-inspired uncertainty.” In other words, despite high demand, people are reluctant to give up the one thing that makes them feel secure in these tough times. Daniel Leventhal, CEO of the real estate investment company Mishorim, specializing in the commercial and office sector, holds a different approach. “For us, raising property value doesn’t stop when we’ve reached a certain number, but rather when we feel we’ve maximized the possible value the asset can reach. That goal constantly changes due to the financial and other enviroment”