Looking to jump into real estate? Hoping to find that perfect seller's market? Well, here's a clichéd piece of advice that will always ring true, especially in this industry: keep in mind that it's always about
"LOCATION, LOCATION, LOCATION".
Market conditions vary greatly depending upon the area in which you're looking. Important clues to keep an eye out for include: the area's job market and unemployment rates, income rates, and population count. And as we always say here at The Brownstone group, it is ALWAYS a good idea to consult your local real estate agent. He or she can enlighten you on housing prices and speed of the local market. Statistics, like those in the S&P/Case-Shiller Home Price Index, are also nifty ways of gauging a potential hunting ground. There are country-wide formulas and stats used to determine housing market success, but remember that each market is unique and changes in its own way depending on the geographical circumstances.
The article this blog is loosely paraphrasing describes three different types of markets for buyers and sellers to be aware of: frothy, tepid, and stalled. For our purposes, we're going to use more direct descriptors: Great, Good, Not So Good (for sellers).
Market: Great!
Sellers. Ding, ding , ding! You've hit the jackpot! Great sellers' markets are those that have steep home price increases and low inventory that moves fast due to high demand. But just because you're in a great market, doesn't mean you can slack. Consulting with a local real estate agent can help you keep your home in tip top shape and sell faster. Practices like keeping a house in order and in good condition and pricing it appropriately will help you acquire the better deal in this booming market.
Buyers. Things are moving quickly, so be ready to move quickly too. Your initial offer needs to be your best offer (not only a competitive price, but strong terms); there's no time for haggling here! If a seller doesn't like your offer, he or she has plenty more to choose from so the take-away is that you don't really have the option to move slowly or be overly picky. But no need to panic! Buyers need to keep their cool. And guess what helps the most? Using a local real estate agent!
Winner in a Great! Market? The prize goes to sellers who control the outcome in Great markets.
Market: Good
Sellers. In a Good market, houses may not be flying off the listings, but sellers aren't struggling to sell homes either. You'll see a good amount of traffic and prices aren't too shabby. But you will have to put in a little bit more work to make your buyers happy, and cooperative.
Buyers. Congrats! You're more on par for bartering with sellers and getting an equal deal. Deep breath! No need to act as swiftly as you would in a Great market. You have more time to search, to negotiate, and to get that perfect deal from your sellers. Make sure you know where homes are selling in your market so you can more knowledgably interact bargain.
Winner in a Good Market? In Good markets, you'll find the most balance between buyers and sellers. Looks like a win-win y'all! Especially if you implement your local real estate agent to buy and sell to the best of your abilities.
Market: Not So Good...
Sellers. The Yahoo Finance article calls this market "Stalled" and for good reason. Sellers encounter a slow moving housing inventory, where housing is usually saturated and too much competition exists (markets can struggle with one of either of these issues or both simultaneously). Despite this, sellers need to price homes aggressively in order to get the best bang for their buck. Buyers will have time to do their homework, so overpricing will be transparent and harmful to your sale.
Buyers. This is most definitely your stomping ground! There are plenty of options and lots of time. Basically, the ball is in your court. However, this does not mean you should slack either. You should still do your homework on your local market and available real estate. Negotiations are more in your favor, so play to get the best deal. You can take your time with making an offer here without threat of losing out as quickly as you would in the other two markets.
Winner in a Not So Good market? Buyers are clearly at the tippity-top. They control this particular market, so be ready when it comes to selling a home. And as always, a local real estate agent can help both the buyer and the seller obtain the right deal.
Interested in the current U.S. markets? Here are a couple of examples for each:
Great!
San Francisco is a great sellers' market! Inventory is low, the job market is strong, and competition between buyers is fierce.
Los Angeles is also hopping when it comes to prices worthy of the Sultan of Sales.
Keep an eye out for Midland, Texas and Phoenix, too. Prices are expected to appreciate, leaving sellers in these markets very appreciative.
Good.
Philadelphia is one example of a Good market. For sellers, prices aren't too low and beginning to rise yet buyers still have comfortable wiggle room within their preferred budgets. Markets oscillate between hot and lukewarm, where the time between listing and selling a home changes from fast to tolerable.
Chicago, Kansas City, and Columbus, OH are also Good markets for both buyers and sellers.
Not So Great...
Generally, the Not So Great markets are currently in New England, upstate New York, and the Deep South (count Houston out though- this market is booming. See articles like: http://activerain.com/blogsview/3777612/the-places-to-be-in-around-houston for more information). What do these places have in common? Old economies and small populations. Inventory can be saturated and competition to sell can be high creating a poor sellers', but a great buyers', market.
Article citation: Hoak, Amy. (August 5, 2013). Is your housing market hot or not? Yahoo! Finance. Retrieved August 6,2013 from: http://finance.yahoo.com/news/housing-market-hot-not-100118864.html.
Picture source: http://inside-real-estate.com/dustindye/
Comments(0)