When buying or selling a home in today's market, many people have the same concern: will the housing recession continue to get worse, or has my local housing market hit bottom and begun to improve? There are three major indicators a buyer or seller can look at to determine if the housing market in their area beginning to recover.
Local employment rates are a very important indicator of local housing market strength. Although the nationwide unemployment rate is still very high, the communities that are experiencing housing market recovery also have unemployment rates lower than national averages. A community that has recession-resistant employment, such as Springfield, Missouri with its universities and hospitals, is at a further advantage to recover from a housing recession quicker. When looking to buy a home, choose an area where local employment is strong and growing, like the Springfield, MO job market, where a local manufacturer announced plans to add 131 new positions. Doing this will leave you less likely to feel the effects of a housing recession.
When considering whether to buy or sell a home, take a look at local home rent prices. The areas that withstood the housing market recession and have begun to recover tend to experience less renting. When considering buying a first home, most buyers weigh the options of buying versus renting. When housing prices are more than fifteen times the annual rent total, it is more economical to rent. Conversely, when housing prices are less than fifteen times annual rent, the market favors buyers. The areas that have lower housing prices compared to renting prices are areas where local housing markets are stronger.
A third indicator of the strength of a housing market the amount of foreclosures in that area. Foreclosed homes lower the value of other homes for sale in the area. High foreclosure rates also can indicate high rates of unemployment, which has already been discussed as a negative sign of housing recovery. When listing a home for sale, a seller is more likely to receive a better price in an area with a low foreclosure rate; see other indications of housing market recovery.
When buying or selling a home, it is important to understand your local housing market. While navigating the home selling or home buying process can sometimes be confusing, having a Realtor on your side will always ensure you get the best information working for you.
For help with buying or selling a home in the Springfield, Nixa, and Ozark, MO housing market, contact Ana Spradling, Your Realtor with Real Results!