Real estate has its ups and downs, and it varies from year to year and city to city. One city may be a seller’s market in which multiple buyers are bidding against each other and often paying more than the asking price. Another city may have a lot of inventory and be a buyer’s market in which they can find a home for a great deal with little or no competition. Smart individuals understand that the market is going to fluctuate and things will change, sometimes very quickly. There are things to be aware of when you are considering getting into or out of the real estate market.
Take Emotion Out of the Equation
People often use current stats and energies to make a decision about the real estate market. When the market is strong and booming, many blindly jump in and assume that it will continue to go up and big increases in appreciations are the norm. People who are guided by their emotions are the ones who often find themselves in hot water when the market slows. The key is to look at the market with a non-emotional and strategic view, and then you will have a better idea of what will be going on 18 months from now.
Let Economics Be Your Guide
Some strong indicators of how the market is going to respond are business hiring patterns and the overall economics of the city. When there is a lot of job growth, this often brings in new people from other cities and even from international locations. This brings upon a bigger demand for housing, which usually causes prices to rise.
Weather patterns can also have a huge impact on real estate. Areas that experience damage from hurricanes, floods, earthquakes, or other natural disasters can tighten the rental market while home owners are looking for temporary housing while repairs are being made. The key to a difficult real estate climate is to be strategic and keep emotions out of your decision-making process.