Have you ever wondered how the pro’s time the rivers and peaks of a real estate market? If you plan on making money by investing in real estate, knowing the key real estate market indicators is essential to timing the up’s and down’s.
Key Market Indicator: Know Your Markets Home Sales
In order to time a real estate market, you have to do some homework first. Knowing what homes are actually selling, not just sitting on the market, is crucial. In order to gauge the existing home sales markets, gather some data from your local trusted real estate professional. Talking to a Realtor about your state’s sales, county sales, and even the best selling or worst selling neighborhoods should be your first step.
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 Starts
A New home permit is where a builder has received the okay to build a new home. These permits should be watched closely, as new construction is a great indication of real estate market up’s and down’s. As new construction permits rise, markets tend to be low on inventory, as buyers decide to build over buyiny an existing home. As new home permits dwindle, buyers are faced with more inventory, and markets tend to slack as buyers become wary. Buyers are more cautious to build as it is more risky, so watch this trend closely.
While watching the new construction starts, you can’t gauge the progress on a month to month basis, rather you need to look at trends over long periods of time. Study past decades such as the 1990′s and 1980′s to get a feel for how new construction relates to up’s and down’s in real estate. Once you feel comfortable how your area adjust’s to market trends, move onto the next real estate market indicator.
Key Market Indicator – Notice Of Default
Home owners that are behind on their mortgage payments are sent a notice of foreclosure. The first thing a bank will do to start the foreclosure process is file a notice of foreclosure. Check with your local county record holder as they are the people who file these notices for the banks.
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.
For expert investment advice in Northern, Utah please visit Lisa Udy’s Providence Utah homes for sale and Smithfield Utah homes for sale websites.
