And as you say, who wants to grab at a dropping knife?
I wish I was clever enough to come up with that phrase.
I didn't come up with it, the real estate industry coined it long before I got involved with RE back in 2004. It's a great phrase that says a lot to describe that particular market situation.
Definitely a great way to describe it.
Never heard the real estate thing.
Every restaurant I've worked in since 1976 has taught to let a falling knife fall.
Every restaurant I've worked in since 1976 has taught to let a falling knife fall.
In RE, when a market segment is dropping in value, just like in stocks, one does not know precisely when to jump in to "grab the falling knife", to get a bargain before someone else grabs it. You could jump in at a 15% price drop point, but is the price going to continue to drop? Lets say you buy at that 15% price drop, but the market price continues to drop significantly. OUCH, you just got cut by the falling knife and you're going to bleed money. This will apply to anyone buying into the DC area too soon thinking they are getting a deal. The valuations will continue to drop for the next couple of years, maybe longer. Those DC market prices will take time to stabilize after the swamp is drained.
The restauraunt phrase is because grabbing at a dropping knife is physically very dangerous, and not doing it damn good advice to avoid unnecessary injury. RE took that term for a similar situation describing the financial danger of acting too soon in their industry. It fits really, really well.
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