To Buy or Not to Buy: Your Guide to the Housing Market
Sep 26, 2019 02:27
As a homebuyer, it's challenging to keep track of when it's a good time to buy a house. Get help by reading this buyer's guide to the housing market.
If you want to buy a home, you want to make sure that the value of the property increases over time. About 10% of the homes are underwater, meaning that the mortgage is larger than the value of the home.
That’s a nightmare scenario for homebuyers and investors. Your job is to know and understand the housing market before you buy.
That may seem like trying to read tea leaves. How can you read the housing market to know when it’s the best time to buy a house? Keep reading to find out.
1. Check Economic Indicators
The reason why so many people love the real estate market is that it’s a little more predictable than the stock market.
The stock market is incredibly volatile, and that’s not expected to stop in the near future. If there’s one indicator or blue-chip stock that drops, the whole market reacts immediately.
Real estate, on the other hand, tends to be slower to react to things like job and housing reports. Interest rates also have an impact on the housing market. Usually, when rates go up, people buy less.
You want to pay attention to home sales, new home sales, and the home price index. These reports will give you a general idea as to the overall health of the housing market.
2. Understand Your Local Market
Economic indicators are good for understanding the housing market at the national level. That’s a good place to start. Now, you need to dig deeper into state and local markets.
The housing market can vary from town to town, even neighborhood to neighborhood. One area may be thriving with million-dollar homes. A few blocks away may be a struggling neighborhood with homes that are worth much, much less.
3. Talk to People on the Ground Floor
The best way to get a handle on the housing market is to talk to people. Talk to investors and real estate agents who are in the know.
For example, a developer may ask for a change in local zoning laws to build a new multi-use property. That can be enough to draw businesses and change the neighborhood. That can also impact local housing prices.
You’ll also get an idea as to which neighborhoods are seen as up and coming neighborhoods. These neighborhoods usually offer the most promising returns.
Understand the Housing Market
Whether you’re an investor or a first-time homebuyer, you want to make sure that your investment pays off in the future.
The key to that is understanding the housing market and knowing when and where you should buy a home. You have to look at factors on a national and local level to get a clear picture of what’s happening in the market.
Would you like to learn more about homes? Check out the Home and Design section of the blog often for more great articles.
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