Great Post worth re-blogging
My Take on Spring of 2014: Conflicting Data Confuses Sellers and Buyers Alike
This Fall there were multiple reports coming out predicting two opposing market trends. On one side home prices were going up and on the other side home affordability was going down. If accurate (which I believe they both are), there will be a small albeit larger window of opportunity for both parties this Spring.
Sellers must find a way to price their home in the range of affordability in respect to their neighborhoods and buyers have to fit their expectations into a reality they may not fully comprehend.
I foresee sellers lowing their prices to meet the affordability restrictions of their potential buyers or they must be willing to keep their property on the market for that right buyer to come along.
Buyers will have to come to the realistic conclusion that they will be getting less house than they originally expected. Even the foreclosure hunters are seeing prices closer to market value.
Aside from the basics there are also external factors that should be considered when pricing a home.
Economic Indicators and Market Trends can tell us what direction the market is going before we actually get there. It won't tell us the final destination or a clear cut expectation, but we can at least use it to estimate were the market is going.
If you're the type of buyer or seller that likes to time the market indicators can be very useful.
For example, if you follow a twelve month trend for home prices you may notice them start to peak and if you pair that with inventory you can also estimate were inventory may bottom out to take full advantage of selling.
If you're a buyer you might watch prices bottom out and inventory peak. However, when a trend line bottoms out or peaks it can turn quickly, so you'll want to estimate the best you can when estimating the turning point in the market.
Interest Rates can also be a determining factor on buying a home.
For some, if interest rates reach a certain level they may be too high for them to buy and if interest rates are very low this may allow more buyers in to the market.
You might find that depending on were the interest rate falls your buying power may increase or decrease, so timing your purchase were interest rates are lower may be to your advantage.
I think most sellers are well aware that there is more going on in the Spring than there is in the Fall and Winter. However, I have found that sellers get a little more for their home when there are fewer buyers looking in the later part of the year because there are fewer homes to choose from.
Market Conditions in your Town/Neighborhood
Every market is different. A neighborhood/town could have completely different conditions compared to the next town over and can even be very different from the regional market.
A lot of that has to do with whether or not their are buyers for that area and price range. If there's as shortage or over supply this can push prices in any direction.
Employment can also be a big factor in determining what direction prices goes and impact inventory quite a bit.
If unemployment is high there won't be much buying, but if a community has an influx of jobs it can experience tremendous growth.
Nearly 1,300 Homes Sold in 2013
Eric Hempler is a Minnesota Realtor with RE/MAX Advantage Plus on the Minnesota Real Estate Team, #1 Real Estate Team in Minnesota since 2006.
Eric Hempler can be reached at 651-491-3393 or ehempler@TCHomeAdvisors.com