Time The Real Estate Market With These Market Indicators
Wouldn’t it be nice if you could time the ups and downs of your real estate market? Being able to buy low and sell high is the key to successful real estate investing, and knowing the key real estate market indicators will help you do just that, time the real estate market.
Key Market Indicator – Gauge Market Activity
Timing a real estate market requires you to do the necessary studying of existing home sales numbers. You have to know which homes are selling, which homes aren’t selling, and the areas where they’re selling. Talk to a real estate professional about existing home sales, ask them to gather enough data for you to feel comfortable. Chatting with your agent is the best way to gauge your state’s sales, and will help you with the first step in timing the market.
High performing properties is what you should be looking for when studying existing home sales. Try to find neighborhoods with low inventory and good sales numbers. After discovering the areas with great outlook, pick out foreclosure and short sale listings, as they will be the best priced.
Key Market Indicator: New Construction Permits
New home building permits is where construction companies apply for a new build project. The construction market will indicate real estate market trends. As home building permits rise, it indicates low inventory levels as home buyers can’t find what they want on the market, so they decided to build a new home. As new construction goes down, it shows market volatility, as home buyers don’t want to take the risk of building.
Watching new construction trends should be a long term assignment, as long term trends will show the true nature of the market. Studying the trends of past decades will give you a good standard to compare how the new construction markets are trending today. As you get more educated on how your market follows the trends, you can then move on to the next real estate market indicator.
Key Market Indicator – Pre-Foreclosure Notice
When home owners can no longer pay their house payment, banks will move to foreclose. The first step for a bank to foreclose is to file a notice of default. You can gather this information by heading to your local courthouse or county record holders. They are the first to report the notice of defaults.
The notice of default records should provide great data for you to study, as they will tell you where a real estate market is headed. The areas with a lot of default notices you should stay away from, as sharp declines will be on the way. Not all notices turn into a foreclosure, so keep that in mind. Neighborhoods with foreclosures may have great deals, but you could lose a lot money, so be careful.
Key Market Indicator – Short Sales And Foreclosures
Buying foreclosures and short sales can be a great way to make instant return on your investment, but be careful. The more foreclosures and short sale in an areas, the more home prices will decline. Try to find neighborhoods with very few short sales and foreclosures, as they will hold value and the appreciation will come sooner.
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