Understanding real estate trends is vital to making a successful purchase, and particularly a successful investment. However, understanding these trends is hugely complex, and something best left to professionals like David M Giunta. They know what the trends are and what they mean for investors.
Important Real Estate Trends
A key trend is the average property listing tie. If, for instance, it is four months, then it means it will usually take around 120 days before a property is sold. Of course, this doesn’t mean that all properties will sell within that time. Some may still be unsold after five months, or even 12. But the longer they go over, the more likely it is that there is something wrong.
Next, there is the number of properties that are available in a certain area. If there are lots of homes available, you will have a lot of options to choose from. If there aren’t many homes, then you will probably have to pay a little bit more.
These are two key trends and you should combine them in order to make a decision in terms of your real estate choices. You should also look at how these two figures compare to the state average, and the national average. If these are wholly different, and particularly if the listing time and number of properties is higher in the area you are interested in, then it usually means that:
- The market is saturated with sellers.
- Finalizing a sale takes a long time.
- The market is friendly for buyers.
What this means is that now is a very good time to buy!
However, understanding the above does not make you a real estate expert, and it is all too easy to jump to the wrong conclusions. First time buyers in particular have often misinterpreted data, and this lead to them missing out on an excellent deal. For instance, they may forget about interest rates. For example, the property may be much cheaper than anywhere else, but if a mortgage rate is much higher than the national average, it will actually cost a lot more overall.
In fact, interest rates change everything! Normally speaking, interest rates drop if there is a high supply and low demand. If there are high interest rates, then all the rules tend to go out the window. For instance, the listing time may be long not because there are few buyers, but because people simply can’t get finance. And the number of properties may be high because many people have had their homes foreclosed on.
Real estate trends are important, but they are also highly limited. They are not there to help guarantee you a great deal. Rather, they are a small element of the overall market, helping you to understand a small part of it. Whether you are looking for an investment property or one to live in yourself, you should always work with professionals in order to really get the best deal.