Assessing the Market
Real Estate runs in cycles.
Like any consumer product, there are good times and bad times. Supply and demand, confidence in the economy, the jobs market plus mortgage rates are the key elements in determining the state of the real estate market.
When you are on the road to home ownership or to sell your current home, you will have to assess the state of the real estate market quickly.
There are 3 kinds of markets:
- Seller’s Market
- Buyer’s Market
- Normal Market
A Seller’s Market is when there are more Buyers than there are homes for sale. Prices will usually appreciate and there is not as much negotiation or flexibility. To a Buyer, this means an aggressive approach must be taken, and if you see what you want, be prepared to act.
A Buyer’s Marketis when there are lots of houses for sale and not too many buyers. Prices usually become more negotiable and some good incentives can be offered. This occurs when the economy isn’t strong, consumer confidence is low and interest rates are high.
A Normal Market is when everything is steady and life is in balance. It is the ideal market and doesn’t seem to happen very often or for long periods of time.
During the education process, really try to understand what type of market you will be dealing in. It has a significant impact on the style of negotiation you and your agent will use.