Dont ignore housing statistics and the market until you become involved in the purchase or sale of a home. It’s only natural then that what impacts the market is a often a mystery to many. What determines a buyers’ or sellers’ market? What factors influence home prices?
Of course the answers to these questions and more may be complicated, but it’s important to pay attention to them so you keep more of your money when it’s time to buy or sell real estate.
Even in what seems like a bad time for the real estate markets, there will be a good times to come for some.
Pay Attention to Interest Rates
Its no secret that obtaining a lower interest rate for a mortgage typically allows for a lower payment. Low interest rates make home-buying an attractive move and, even a mention of rates going up can get people to get out into the market. Just like by the end of 2017, the U.S. saw 5.51 million home sales, which was the strongest housing market since 2006. Some attributed the vigorous market, in part, to the possibility of higher mortgage rates in coming months. They have risen but recognize that, after going up, rates were still at historic lows. The bottom line is that if you’re in the market for a home and interest rates decrease or remain attractively low, get excited about the housing market.
The Economy
The current economy is a key factor affecting the real estate market. When the economy is stable, the housing market is at its most attractive.
When job growth is strong, consumer confidence rises and we’re more likely to spend money on expensive items, like cars, appliances, vacations and, of course, homes.
Exciting Markets for Sellers
The best time to sell a home is when you need to sell your home. We understand that isn’t very helpful. If you’re one of the fortunate who has no compelling reason to sell (such as a job offer in a different town or divorce), you have the luxury of choosing when to put the home on the market.
Get excited if real estate professionals mention the words “sellers’ market.” This is a period in which there are few homes for sale but buyer demand is high. During sellers’ markets prices typically increase rapidly and homes sell at or above list price.
One of the biggest mistakes we see in sellers’ markets is the homeowner who feels that the market itself will bring top dollar for the home, regardless of condition. Be aware that it’s the homes in good condition that sell the quickest and for the most amount of money. Regardless if market conditions favor sellers, if your home isn’t in move-in condition, it may be passed over by home buyers.
Buying a Home This Year?
A buyers’ market—when there is a large selection of homes for sale and few other buyers in the market—is a great time to purchase a home. Unlike a sellers’ market, prices aren’t rapidly escalating and you won’t be competing against a lot of other buyers. These markets are more relaxed so homebuyers can take their time deciding.
In a sellers’ market, however, it’s more important than ever to have all your ducks in a row before making an offer on a property. Ensure you know exactly how much you can spend and that you’ve obtained a pre-approval letter from your lender. Make your offer stand out from others by keeping it lean and mean, with the shortest time periods for contingencies as possible. Finally, come in with your highest and best offer. A sellers’ market moves too quickly to assume the homeowner will negotiate over price.
While the type of market may determine when to jump in, as mentioned earlier, interest rates can also cause excitement in the housing market. Low rates and relaxed lending guidelines present a prime opportunity for many would-be buyers who previously couldn’t afford to purchase.
Lower mortgage rates mean a lower monthly payment, which means you have more purchasing power, and that additional power can mean the difference between buying bedroom, closets space and, buying an upgraded home versus a dated one
There is always a mix of good and bad news, depending on whether you are in the market to buy or to sell. Arm yourself with a professional Realtor who can supply you with current and local market information, follow his or her advice and buying or selling a home in any market will be a great process