Whether you are selling your current home or buying a new one, understanding local housing market reports is of the utmost importance. Only this way can you avoid not paying an exorbitant price for real estate in an area that offers no perspective to you or your family. Also, you significantly reduce the risk of selling your real estate at a price too low to provide you with the financial means you deserve. Understandably, hiring an expert in the field, an experienced and knowledgeable real estate agent in your area, is always an intelligent choice you should consider. If, however, you are willing to make an effort and master the subject yourself, here is some useful information for you.
How to recognize a good local housing market
Both individuals and genuine professionals in this business can benefit from knowing and understanding the characteristics of a good local housing market. Firstly, if you want to sell your property, knowing that your local housing market is good gives you hope that you will find proper buyers in no time. On the other hand, if you are a buyer yourself, a good market indicates a bright future for you and your family and an investment completely worth making.
One of the first signs that you are dealing with a good neighborhood that offers a lot of amenities is the continuous trend of rising prices. If the number of sales is increasing as well, you can deduct that you are not the only person who has recognized the potential of the given area. Quite the opposite. You might expect serious competition in finding a perfect house for you.
Another sign to bear in mind is the situation when homeowners sell their houses at the listing prices or slightly below them. This means that buyers too are well aware of the houses’ values and are willing to accept the owners’ offers without much negotiating.
Finally, if the number of prospective buyers is significantly higher than the number of houses for sale, it means that the area you are considering is promising and can be the right choice if you decide to invest in real estate.
What do local housing market reports include?
Local housing market reports include all the critical pieces of information regarding the current trends in the real estate industry on the local level. They are written every month to serve both real estate agents and their clients as an indicator of what to expect in this field. When working with your real estate agent, you will analyze these reports frequently to find the offer that suits you and your interests best.
Here is what local housing market reports most often include:
• Relevant statistics for various types of housing available in the local area
• Current trends in home buying and selling
• Median home values
• The median price per square foot
• Median household income
• Number of successful transactions
• Demographics
Median equals average – actually not!
One of the most frequently misunderstood terms in local housing market reports is the median home value. Not seldom do amateurs in this field think that median and average are equal, but the truth is completely different. Since the median means 'in the middle', it implies that there is an exact number of prices that are higher and lower than this stated price. For example, if the prices of certain homes are $200,000, $315,000, $350,000, $400,000, and $425,000, the median home value in this case is $350,000 because this is the price 'in the middle'. Similarly, the average price in the same case would be $338,000.
How to assess the data in local housing market reports
Being in the possession of the local housing market reports is not enough if you do not know how to assess the given data. If you are not well-acquainted with the terms, one of the most important things to ask your real estate agent will be to decipher what is given in the reports. Luckily, we can help you prepare in advance to be able to participate in communication actively.
Here is what you need to pay attention to:
• Supply and demand analysis – Pay close attention to the number of people who are willing to move to the area you are considering. Are they moving their families only or do they see any opportunities to improve and expand their business as well? Only then should you invest in real estate here and eventually contact reputable movers like Miami Movers for Less to relocate your belongings as soon as possible.
• The key economic factors – What job opportunities does the area offer? Can you earn a considerable income to provide yourself and your family with the life of decent quality? It is a wide known fact that affordability significantly increases the interest in the area. The more they are confident in the bright future and ample job opportunities in the area, the more are people willing to invest in real estate here. Also, economic factors can tell you if moving your HQ somewhere else is a good idea or you can situate your business in the neighborhood.
• The number of transactions – The number of transactions can tell you a lot about your chances for success, be it as a seller or a buyer. If the houses do not spend much time listed, it means that people do not hesitate much once they find something appropriate. The same situation tells sellers they will not waste too much time until they get the offer they cannot turn down.
• The median household income – This is an unmistakable indicator of whether there are any discrepancies between the costs of living and the opportunities the job market in the local area offers. If your household income does not suffice to cover all the costs, this is a sure sign you need to invest and move elsewhere.
Final words on understanding local housing market reports
Understanding local housing market reports is important for everyone looking to buy or sell property any time soon. Even though a vast majority of people decide to hire a professional local real estate agent, knowing the relevant local housing market facts will help you communicate with your agent on a professional level. Hence, invest some of your time and effort to master the key information in these reports and you will be able to identify your chances in the given area efficiently and quite easily.
Written By: Lisa Robert with US Moving Experts