Understanding The Real Estate Marketplace
By Mark & Annmarie Lenson
People Like Us....People Trust Us
Put Our Experience On Your Side....We Sold Almost 800 Homes
Due to real estate being local in nature, the abundance of home value statistics nationwide has little to no meaning as to what is happening locally. When you hear nationwide figures that report new home sales are up 2%, that the resale market is up 5%, that new home buyer sales are up 6% and that general home ownership is at an all-time high....it does not mean homes in your subdivision are up correspondingly. Your subdivision could be up a lot more. Or not. Or less. The market can be as different in the east of your hometown as it is in the west, even subdivision by subdivision in the entirety of your town.
What typically drives the real estate market? JOBS! As people move from one part of the country to another due to jobs, the market heats up where people are moving to and tends to cool down where people are coming from. (Provided large groups of people are moving.) Several years back, Salt Lake City, Utah, was the hottest market in the USA for a while. Prices soared due to several large companies moving their offices to Salt Lake City.
The author has long said, buying and selling a home is not too dissimilar from the stock market. You can ask a well-experienced stock broker about what will happen to the stock market Wednesday, and the only truthful answer is that he does not know. Your purchasing a home today for $200,000 does not guarantee it will go up 2% per year, 5% per year, 8% per year, hold steady, or even depreciate in value. No one truly knows from day to day what will happen in the marketplace. Nationwide figures are referring to nationwide trends not trends in your personal subdivision.
You may be in a Sellers Market or a Buyers market or a transitional market. The conditions that make a good market can change in very short order. All it takes is the entrance of a major employer, or it could be a subtle change via word of mouth.
When Buyers are looking for a bargain and see others take a chance, re-habbing a home or knocking a home down due to the value in the land, the neighborhood may be in the process of transitioning upward in value. Homes that have sat unsold may be on the verge of selling. Young people may be moving in and making improvements, adding on to their homes, and turning the area into a more desirable and valuable market.
For Sale Buy Owners have to be particularly cautious since it is ever so easy to undersell your home or price it way too high for the market and sit around not selling while strangers come in and out of your home.
No matter what kind of market you are in, be it depressed or otherwise, there will be a buyer for your home. Several years back when the interest rates were well into the double digits, people were still buying homes. The key is knowing the market conditions and pricing your home appropriately in the marketplace.
Your Realtor will help you understand what to expect in your market. The competitive market analysis will show you how quickly homes are or are not selling and for how much. Then you can get an idea of what selling your home in the market will be like....by actual sales going on in your neighborhood, and not by what is selling (or not selling) in any other area.
