How to Predict Home Prices

Submitted by tracey hartley on February 2, 2012 - 13:23

You want to put an offer on a home, but you are worried that prices will fall and you'll pay too much.  You're putting your home on the market and you want to sell it for the highest price in the shortest time possible.  You've found a great deal on a "bank-owned" property, but is it really a great deal?

Wouldn't it be nice if we had a guide to help us through some of the most expensive decisions in our lives?

The most important factor of buying or selling property is anticipating the market.  Almost all housing data that we hear is based on national averages and metro real estate markets, not the LOCAL market that affects us.  Using national averages to determine local trends is like using a national weather forcast to make plans for your next ski trip to Snowshoe!

You don't need a crystal ball to see what the local market will look like in three to six months.  All you do need is a good understanding of the factors that shape supply and demand and local housing information.  Supply and demand.  If demand is greater than supply, prices will increase.  If supply exceeds demand, prices tend to fall.  A number of factors affect inventory.  When prices increase, sellers tend to list their properties, thus increasing supply.  When prices decrease this encourages bargin hunting buyers to buy and inventory shrinks.

Employment.  The single most driving factor for housing demand is jobs.  Buyers can't get a loan if they are not employed  According to a recent article in The Dominion Post, unemployment is at an all time low in our region. So that is good news for us!

Mortgage Rates.  Rates have a huge impact on demand.    And luckly mortgage rates are still at an all time low, again great news for us.

Season.  Housing is a seasonal business.  Families want to buy in the spring so they can move during the summer before school starts.  Even for residens starting at the hospitals, they tend to want to be settled  during the same time.  Parents of college students want to find housing for their children by August.  So try to keep all these factors in mind.

The name of the game in real estate is timing.....and  based on all the factors mentioned above, this is the ideal time for you to consider buying or selling your home.  Contact KLM Properties for more details!