Knowing when real estate markets are headed into a decline or showing appreciation is the key to real estate investing. These key real estate market indicators are used by experience investors to gauge the up’s and down’s, allowing them to time their prospective real estate markets.
Key Market Indicator – Existing Home Sales
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 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.
As you watch new home starts and the construction market, it’s important to realize you have to give it time to show underlying trends. The best way to understand trends, is to follow history closely, and use the trends of the past go understand the trends of today. As you get an understanding of where your markets new construction trends are headed, you should use move to the next indicator.
Key Market Indicator – Pre-Foreclosure Notice
Banks will move to foreclose on a home owner if they miss their mortgage payments, and the first step to do this is filing of a notice of default. These notices are public record and can be found by requesting them from your local country record’s holder, or possibly the courthouse.
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, UT please visit Lisa Udy’s Providence UT homes and Smithfield UT homes websites.