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I Will Buy When The Market Crashes and Other Lies We Tell Ourselves

One of the biggest lies that people tell themselves is that they are waiting for the market to crash and then they will invest in real estate. Whenever the Toronto condo market eventually slows down or “crashes”, people who have been saying this will never buy. Trying to time the market is a fools’ game, find out what you should do instead on this episode.

Click Here for Episode Transcript

Andrew : Toronto real estate prices have been rising steadily for the past twenty years, which leaves some would be investors wondering if they should wait for the market to correct itself, before buying in. Find out what I think about this strategy, on today’s episode.
Male: Welcome to the True Condos Podcast, with Andrew la Fleur. He planks to get the truth on the Toronto condo market, and condo investing in Toronto.
Andrew : Well, welcome back to the show. As I said in the intro, one of the most common questions I get, or one of the most common comments that I get from people, is that they are waiting for the market to crash. They are waiting for a price correction. They are waiting for the market to tank. They are waiting for real estate to decrease in price. That, they say, is when they will buy in. They say they are just going to be patient, until that happens. Well, I have to say, this is one of, if not the biggest lie, that people tell themselves. It is completely untrue, and I am going to tell you why I think so, on this episode.
We are talking about timing the market, and people attempting to pick, and choose, their spots of where, in the market, they are going to buy. Looking for that crystal ball effect, where they can say, “Okay, this is the moment, or the moment is coming, in some point in the future. Where the prices will be at the bottom, and then I will ride it out to the top.” I guess, presumably those same people would say they would sell it at the top, in this kind of a thing, as if it were that simple of an equation. This is my message for you, if you are thinking in that way, or maybe you know someone who thinks like that, who has been telling you that. This podcast is something that you can share with them. Here is what I have to say to the person who is waiting for the market to tank, before they buy. You will not buy anything. I guarantee, you will not buy anything, if the market ever actually does tank.
I do agree, and I do confess, and I have never said differently, that the market will at some point correct. The market in Toronto can not go up forever. It will eventually correct itself, in the sense that prices will go down, at some point. They won’t always go up, as they have been, essentially, for twenty years. Unabated, except for a brief period in 2008. Prices will go down, at some point. I guarantee you, the person who is saying this, that you will not buy anything when the market goes down. How do I know this? Why am I so certain about this? Well, it is really simple. You are not going to buy in Toronto, because you didn’t buy in Florida. Now, hold on a second. What am I talking about Florida for? We are talking about Toronto real estate market. Well, bear with me a second here.
You are not going to buy in Toronto, because you didn’t buy in Florida. You didn’t buy in Las Vegas. You didn’t buy in Detroit. What happened in the last ten years? Let’s refresh our memories. The worst real estate crash, essentially, in the history of the world happened, right next door to us Canadians here, in the USA. Prices were down seventy percent, in some markets. Think about that. Seventy percent, prices went down. What else was happening? The Canadian dollar was at par. Okay, so the Canadian dollar was at par to the US dollar. This has happened, I don’t have my stats in front of me for the Canadian dollars history, but I would suspect that the Canadian dollar being at par, or even if it was above par for a while, that has happened probably twice, maybe in the last fifty years, I am thinking.
Canadian dollar is at par. Prices are down seventy percent in many markets, and you did not buy. Right? You had the greatest opportunity, so called, to buy into a crashed market ever. Ever, and you didn’t buy. You didn’t take action. You didn’t do anything. What makes you think that you are going to do anything differently, if and when, the market in Toronto ever corrects itself? You won’t. You think prices in Toronto are ever going to go down seventy percent from what they are today? Do you think you are going to be able to get a detached home, in downtown Toronto, for two hundred and fifty thousand dollars? It is not going to happen. If the Toronto market ever does correct itself, it is going to be a fraction of what the correction was available to us, just a few years ago, in the US.
The truth is that, who buys in real estate markets when they crash? Who makes money, when the market goes down? It is the people that are already in the market. It is people who have already invested themselves, and taken action, and bought properties already. They just buy more, so this is just another classic case of the rich getting richer. In real estate, we see it time, and time again. The rich continue to get richer. Those people who are already in the market, and who understand how real estate works, if and when, prices ever do fall, yes, sure, some of them take a beating, but the smart people who are strategic, and in the market, will actually get richer. Their wealth will grow even more in troubled times, when prices are falling. The rich are getting richer, and poor, unfortunately, the poor get poorer. The people who are stuck in this mindset of waiting, waiting, waiting. Waiting for the right opportunity. Waiting to time the market. Waiting for the stars to align. “Well, not this opportunity. It doesn’t look quite right. Maybe, the next time. Maybe, the next time. Maybe, next time.”
Years go by, no action is taken. That mentality, that scarcity, or fearful mindset, fearful to take action, unfortunately just result in, it is a perpetual cycle of missed opportunity, after missed opportunity. Building, and building, upon itself. The opportunity cost of not investing in the market, just continues to get worse, and worse, for those people who are stuck in that cycle. I am not trying to be hard on you, if that is your mindset, or if you know somebody who talks like that, or thinks like that. I am actually doing this podcast to encourage you, and to give you concrete actionable things to get out of that mindset. To break that cycle, and to actually get into the market, and to make that decision to step forward, and take action. Bear with me here.
The market just continues to pass you by, if you’re thinking like this, and if you’re holding onto that mindset. Then, again, fear is what is this little thing that speaks in your ear, telling you to tell yourself this lie, that you’re waiting for the market to correct itself, and then you will buy. That is just simply not true. You’re not going to do anything, if the market corrects itself. Prices go down. The people that have that mindset, what we see is, is that the fear actually gets even greater. Because, prices are going down, so why would that person suddenly buy something, when prices are going the other way? It is counterintuitive. It doesn’t make sense. You’re less likely to buy something if prices are going down, that you are when prices are going up, right? Prices are not ever sitting in one spot. They are either going up, or they are going down. Again, this sort of thinking is totally a lie. I want to help you, if you have this mentality, to break the cycle. If you know somebody who is in this mentality, you can hopefully share this with them, and help them to snap out of it, as well.
Flip the coin over. I want to give you some tangible action steps, of how you can actually break this cycle. What you should do, instead of telling yourself that you’re going to buy when the market is going to crash. I go back to my Podcast from a few weeks ago, Episode Ninety Four, How to be a Confident Real Estate Investor. Where I shared a simple mindset, or thinking tool, from a guy named Dan Sullivan, from Strategic Coach. It is called, The Four C’s. The Four C’s are, Commitment, Courage, Capability, and Confidence. Again, go back, and listen to that episode, for more details.
Basically, how you snap out of this, is you make a commitment that you are going to do it, in your mind. You take some courage, and you use that courage to take action, and to actually invest in some property in the market, today. Not waiting, but today. Once you do that, something amazing happens. When you actually take action on something in life, something new, and amazing happens. That is, a mindset shift occurs, where you suddenly feel completely different about your circumstances, and about what is possible. What has happened, is you have developed the Third C, Capability. You have developed a new capability. You are able to now be an investor, and do that thing that you have never done before. When you have that new capability, you gain incredible confidence. When you are confident, when you are a confident investor, you will continue the cycle, and keep doing it again, and again, when you have confidence in what you’re doing.
That is, essentially, the way to think about it. In my mind, the best way to do it. The first step, of course, is after you have committed in your head, in your mind, to doing it, is to actually go out ,and take action. To go out, and buy something. Buy anything that makes sense, as a rental property. Buy something that has upside. What do you do after that? You simply wait. It is really not that complicated. You buy real estate, and you wait. When you do that, and you rinse, and repeat, over many years, you grow tremendous, tremendous amounts of wealth through real estate. Whether markets are going up, or markets are going down, there are always opportunities to buy. There are always properties that make sense to invest in. When you have a long term perspective, you are always going to make money.
People who were in the US, and who bought before the peak, those people who have held on until today have made money, and it has only been ten years, okay? This is the worst real estate crash in history, and it only took ten years for those people to go from the absolute lowest of the low, to now actually having made money. All they had to do, for those people, unfortunate people, who bought at the worst time, right before the worst crash in the history of the world, all those people had to do, was wait it out ten years. Ten years is not that long of a time. Unless you are ninety five years old, and listening to this podcast, ten years is not that long of a time, to wait for an investment. Obviously, most of the time your returns are going to be much faster than that, but if you think worst case scenario, can I wait ten years? You’re always, always going to do well with buying strategically, and buying real estate, strategically.
There you have it. That is today’s episode. Bit of a pep talk. Bit of a rant. Bit of a rallying cry. I don’t know what it is, but something just got me excited about this topic. I hope you appreciated today’s episode, found it useful, for you, or for someone you know. Until next time, we will talk to you soon.
Male: Thanks for listening to the True Condos Podcast. Remember, your positive reviews make a big difference to the show. To learn more about condo investing, become a True Condos subscriber, by visiting