How to Get a Better Read on the Local Market
There is no doubt that you have heard it all before – the fact that you will be cashing in when you seal the deal when you buy real estate. This is because, if you manage to land a good deal, you will always have the chance to reap in a nice profit; however, if you end up paying far too much, it will be extremely difficult to generate a return. Bearing this in mind, how do you continuously snag good deals when each and every geographical market is different in its own way?
The amazing thing with real estate is that no two properties are identical. So while people can issue broad statements about the housing market in the country, the truth is that no two neighborhoods, cities, counties or states have identical valuations. Sure enough, the marketplace will often have a broad trajectory that is either stagnant, positive or negative, however, you can definitely not presume that each and every area responds to the exact same factors.
Since each individual city has their own ecosystem with unique buyer/seller activity and varying valuations, you can search for ways to find a few factors that can help you dissect the overall health of the local market. In order to help you out, here are a few examples…
Transactional Volume
When it comes to a healthy real estate market, the inventory always moves. Hence, there is a lot you can tell about the health of a real estate market from tracking the transactional volume of the real estates that you are interested in over the past 4-8 weeks.
Average Time on Market
One other thing that is important to keep in mind is the average time the real estate is on the market for listings. For example, do these houses take months on end before having that sold sticker plastered on, or do they merely sit for a couple of days before having someone take ownership of them? Obviously, the quicker a property is sold, the higher the demand and vice versa.
Asking Price
There is so much that you can learn from studying current prices and comparing them to the past when it comes to understanding a specific market. If you manage to get accurate knowledge about the past and current price trends, this will definitely aid you in terms of analyzing the growth and expansion of the market throughout the years and thus help you in making a good prognostic forecast of what the market will be like for the real estate in the future.
Take a Read of Independent Research
One of the most crucial things to keep in mind when educating yourself in household data is that industry data tends to be self serving. For example, even if it isn’t self serving, a Realtors data and analysis might look suspicious. After all, their main goal is to sell, sell, sell. Hence, it is best to use the most independent sources possible as you can. In addition, try to steer clear from analysis from general websites such as Trulia and Zillow as they are unlikely to have complete data sets, hence making your education incomplete and inaccurate.