UNDERSTANDING THE REAL ESTATE MARKET
The real estate market, national and local, is in a constant state of change. Some of that change is minor while some is major. Anyone can search the internet and find real estate statistics like median and average home price, sales volume, and the number of homes for sale. What does it all mean and how does doing so help you achieve your real estate objectives?
Real Estate Is Local
Real estate is local and all about location. Every neighborhood, city, and county has unique characteristics rules and regulations, and its own unique buyers, sellers, and trends. Home prices, interest rates, terms, market trends, and economic circumstances evolve daily and vary by location and can mean the difference of hundreds, thousands, and even tens of thousands of dollars in real estate transactions.
Because of this diversity and complexity real estate markets and trends vary greatly depending on location. In the Dallas-Fort Worth area, for example, the median and average listing price, number of homes for sale, sale price and terms, and days on market vary significantly depending upon the area. Figuring out which statistics matter and how to develop and adapt a strategy when buying or selling is another story.
Identifying The Market
There are three types of real estate markets you can find yourself in locally: a seller’s market, a buyer’s market, or a balanced market. The exact market you are in will influence your expectations, dictates the approach you take, and how you approach negotiating.
In a seller’s market, there are fewer listings than there are buyers. This usually makes for higher prices, more demanding terms, and fewer concessions for sellers. If you are in the market to sell a home, a seller’s market is the best time to do it.
In a seller’s market, buyers may have a hard time finding a property due to limited inventory, homes sell quickly, buyers face significant competition, higher price points, appraisal gaps where buyers may have to make additional concessions at the closing, and sellers who can be demanding and less willing to negotiate.
A buyer’s market is one where there are more properties for sale than there are buyers. This means home buyers have the upper hand and have more property choices, as well as more negotiating power on price, repairs, and terms. If you are buying a home, this is the ideal market to do it in.
In a buyer’s market, homes take longer to sell, there are more listings to choose from, and buyers have less competition. Additionally, buyers can make lower offers and negotiate more on sales price and closing costs.
In a buyer’s market, sellers may have to do more to market their properties and may need to lower their price points and be ready to negotiate on repairs and contract terms.
In a balanced market, buyers and sellers are on even ground. Supply and demand are balanced, and neither side has an upper hand. Balanced markets tend to last for shorter amounts of time than buyer’s or seller’s markets, and they usually occur between the transition from one market to the other.
In a balanced market, the number of homes for sale is in line with buyer demand, appraisals usually match offers, home prices do not rise or fall steeply, and buyers and sellers are for the most part on equal ground in negotiations.
Some of the major considerations are home prices, home sales, mortgage rates, inventory, appraisal gaps, and competition. There are all too many expert sources and opinions on the Internet on these topics and depending upon the location, again they vary significantly.
When you plan to invest in real estate, buy or sell a home, it is important to understand the local real estate market and its unique characteristics and trends. While the overall economy, mortgage rates, demographics, and government policies play a role, your purchase or sale will be influenced by the factors at work in your selected, specific market and area. At the onset, it is what you don’t know about what you don’t know that is your biggest risk in real estate.
Our team of real estate advisors interact with and represent buyers, sellers & investors every day. We are passionate about following and understanding the ins and outs and ups and downs of real estate and helping our clients make informed decisions that empower them to achieve maximum return-on-investment on their real estate transactions.
If you are thinking about investing in real estate, buying or selling a home, let’s connect. We can help you achieve significant positive results and would be honored to assist you and have you become a client and friend for life.
Daily Insights, Inside Track & Homeowner Tips
The Real Estate Advisors | REALTORS® from DFWREAdvisors are proud to be your source for all things real estate & mortgage! We strive to be the local experts upon which you can rely. Towards that end, we provide valuable information for buyers and sellers through three sources on our website: Daily Insights | Inside Track | Tips - important information about real estate and mortgage for homeowners, home sellers & home buyers.
Reality Vs. Perception!
We all see things in the news, on the Internet, and we hear things. We hear about a neighbor that sold their house. We wonder, should we? Should we be buying, should we be selling? Is it the right time for us to buy? Is it the right time for us to sell and move on?
Well, it depends on the real estate market, your specific area and situation so let’s connect. We keep up with the latest information and insights on the local and national housing markets. We work with investors, buyers, and sellers every day. Helping you make timely, informed decisions and maximizing your return-on-investment is our differentiation.
Reach out to us today at 469-262-5411. We would be honored to assist you!