Understanding your local housing market is crucial if you own property and are looking to sell it or if you are actively in the market looking for a new home. You don't want to overpay for a new home but you also don't want to fire sell the home you currently have. We're going to break down how to find out if you are in a good or bad real estate market and what you can do about it.
Good or Bad Market?
Typically in a good housing market, home prices will increase while home sales will also increase. As you can see, if the two have a positive correlation, then it is probably a good indicator that you are in a good area. Another great indicator of a good housing market is if home sellers are selling their homes at or near the listing price. Finally, good housing markets have tight inventories. This means that buyers compete for the homes that are on the market. In a bad housing market, the number of buyers available and the number of homes for sale are inversed. Normally, plenty of homes will be on the market with not many buyers able to afford them. This means that it is hard to avoid selling homes at an extreme discount nowhere close to the listing price. One of the worst downsides of a bad housing market is that homeowners will often skip out on maintenance because they won't get out what they put into the home. This leads the home into an even poorer condition, hurting its value. One thing to be aware of is shadow inventory. If you are in a bad real estate market, a shadow market will make it even worse. This is when poor condition homes are added that weren't in the market before, increasing the supply and lowering home prices in the market.
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What Can I Do About It?
In your current market, look at home prices and what they are being sold at. Look at the trend over the past few years and see if it is still on the climb. Look at comparable sales in the area and see what they have sold for. This will give you a very good idea of what your house is worth and what you can sell it for. In America today, the real estate market has seen a very big bounce back since the 2008 housing market crash. Home prices are at highs and people are still buying them up. Unless you are in a very bad market, home prices should be looking very good for you. To get off to a strong start in selling your home, ask Effective Agents to help you sell your home. We can match you to a perfect real estate agent for you and your area, using our proprietary algorithm that sorts through millions of real estate records to get you the top selling agents in your area.