To all would-be home sellers who aim to time the top in real estate prices, best of luck.
In even the most liquid and transparent investment market, catching just the right moment to jump this way or that is a dicey proposition. And real estate is a whole lot less liquid and transparent than most.
No matter how many stories you hear about fortunes made trading houses like bubble-gum cards, it's a market particularly ill-suited to the making of short-term timing moves.
Costs of selling are high, and complications can be many. I can testify to this first hand, being in the process of selling a home myself for personal and family reasons -- not because I have any special insight into whether it's "a good time to sell" or not.
To be sure, evidence abounds of a manic, overheated market in many places. A recent letter to the Wall Street Journal proudly proclaimed that "1.2 million Americans are Realtors," which according to Labor Department data means they now outnumber doctors, police officers, bartenders and even lawyers.
An e-mail crossed my desk recently from a real estate investment outfit that says it has figured out how to keep profiting even after "the real-estate bubble bursts."
Newspapers and other media brim over with expanded coverage of real estate and all its trappings, including cable TV shows celebrating the game of flipping -- buying houses, fixing them up, and selling them again in short order for a handy profit.
"Such programs are yet another attempt to cash in on the widespread misconception that real estate is the road to easy riches," said John T. Reed in his "Real Estate Investor's Monthly" newsletter.
The frenzy in real estate is not without some solid underpinning. They don't call it "real property" for nothing -- it has great human utility as well as investment appeal. Houses can be much nicer to look at and cozier to occupy than a bond or a stock certificate.
As long as the economy prospers and grows, it figures that demand will be strong for the limited supply of desirable places to live.
All the same, any market can get overextended, especially one that is turbocharged by easy credit. The issue of whether a letdown is coming in the housing market is hard enough on its own to answer. The question of when is tougher still.
Recall the last "bubble" that investors experienced, the famous boom-bust of technology stocks in the late 1990s and early 2000s. Hardly a person now alive admits to putting his faith in that oh-so-obvious chase after fool's gold.
Sure enough, before the mania broke there were countless voices raised in warning that the market advance had gone to absurd extremes. Getting the timing right was another matter.
In one of the most celebrated moments of his almost-two decades as chairman of the Federal Reserve, Alan Greenspan pointed in December 1996 to the dangers of "irrational exuberance." The Dow Jones Industrial Average finished that year at 6,448 and, as it turned out, was just getting warmed up.
By the end of 1999, it had climbed to 11,497 -- a 78 percent gain in three years. As bad as the comedown of the 2000-2002 bear market was, the Dow never got back to 6,500 again. By the end of August 2005, according to Bloomberg, the average showed a 92 percent return, including dividends, since December 1996 -- for a payoff that works out to 7.8 percent a year.
There is little dispute today that Greenspan was right, that the stock market was building up excesses that would lead inevitably to trouble. And yet interpreting his warning as a signal to dump all your stocks and stock mutual funds might have proved a most regrettable thing to do.
Today, some say the stock market is still irrationally exuberant. Maybe so. Still, a person could grow old waiting for a better time to buy.
Likewise, homeowners could tie themselves in knots trying to decide when the absolute top of the market for their properties will be seen. The best time to sell, or buy, a house may be whenever you are ready to move.
Currier is a columnist for Bloomberg News