 |
 |
 |
 |
 |
|
|
|
Quick Guide
to Evaluating the Real Estate Market
|
Real estate markets are extremely cyclical, and
pricing and demand are highly influenced by interest rates and
economic conditions. Flexible buyers and sellers can often do very
well by timing their entry into the market.
Choose
a Weak or Strong Market?
Most people who sell a home also have one to buy. Thus, except for
those palnning to rent it can be difficult to choose the optimum
time to sell. It's important to consider all aspects of the
transaction - the homes being bought and sold, interest rates,
time pressure, etc. - to determine what is best for you.
When
is a Weak Market Best?
Generally, it is advisable to act during a weaker market when
moving up - purchasing a more expensive home - since a bargain on
an expensive new home will offset losses on the old one.
When
is a Strong Market Best?
If you are downsizing - moving to a smaller home - you may want to
act during a strong market to maximize gains on your larger
current home. Retirees and empty nesters are primary members of
this group. Since a home is a major asset, choosing the right time
to sell and buy a smaller property can have a major impact on
retirement savings.
Signs
of a Weak Market
A weak market is characterized by large numbers of homes on the
market and stable or declining prices. During weak periods homes
tend to sit on the market for fairly long periods, and sellers may
have difficulty finding buyers.
Signs
of a Strong Market
A strong market is characterized by appreciating prices, tight
inventories, and short selling times. Sellers may find a buyer
quickly - and at a high price. A strong market is a seller's
dream, so consider whether it’s a good time for you to sell.
Signs
of an Overheated Market
Overheated markets are characterized by rapidly increasing prices,
extremely low levels of inventory, and bidding wars for attractive
properties. While obviously an ideal time to sell a home, sellers
should act quickly in this environment - prices almost always
contact sharply when the economy falters.
Market
Lag
Popular perceptions and pricing often lag behind the actual turn
of a market. For example, prices are often slow to react to the
onset of adverse economic conditions, as sellers and agents are
reluctant to accept the change until properties have languished on
the market long enough to force price reductions.
|
|
|
|
|
|
|
|
 |
 |
 |
 |
|
|
|
