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Determining the Local Housing Market

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You may have been contemplating selling your home but aren't sure if it's the right time. The state of the local housing market can be a major factor in your decision. It can make all the difference in how long it takes to sell and what offers you receive. This is how you can determine whether it's a good idea to sell your house.

What Is The Difference Between A Buyer's And Seller's Market?

  • A Buyers' Market?

    A buyers market means that there are more homes available than buyers on the market. This makes the housing market favorable for buyers (unfortunately, for sellers).

  • What Is A Seller's Market?

    A seller's market is one where more buyers are searching for homes than homes are available. As a result, this housing market is more favorable for sellers because you are more likely to get multiple offers, sometimes exceeding your asking price.

How Can I Find Out The Current State Of My Local Housing Market?

  • Talk To A Local Agent:

    Agents are experts in the area's real estate trends and can offer their expertise on market conditions. They will also help you determine how your home is positioned in the local market and what improvements you can make so that your home stands out from its competitors.
     

  • Check Inventory Availability: 

    Real estate inventory can differ from one state to another and from one ZIP code to the next. You must look at what is available at a local level. If the local inventory has less than five months' sales, it is a seller's market. You have a balanced market that favors both buyers and sellers. If you have inventory that is more than seven months old, you are in buyer's territory.
     

    Take the inventory of the houses in your area and divide it by the sales within the last 30 days. This will give you an indication of the inventory. For example, if there are ten houses available for sale in your local area, but only one sale within the past month, then that is ten months of inventory. On the other hand, if ten houses were sold, it's one month inventory and a seller's market.
     

  • Be Aware Of Price Cuts:

    If you look at listings in your local area and see that many sellers have reduced their prices, this could indicate a buyers' market.
     

  • Search For Real Estate Comparables:

    Comparable is a list of recent sales in your local area of similar homes in the same location, age, and number. You can get a sense of the market's health by looking at comparables in your neighborhood. For example, what is the average selling price of similar houses in your area? You're likely to be in a seller's market if your housing comps sell for the asking price or more.
     

  • Take Note Of The Time That Homes Have Been On The Market:

    Drive around your area and take note of the new listings. Do they remain "Active" even after a few weeks? After a few weeks, are they "Pending," or are they still listed as "Active"? Your home is more likely to go under contract the faster they do.
     

  • Track Trends In Home Prices Sales: 

    Are there any price increases or decreases in your local area? Seller's market if prices have been increasing in recent months and are projected to continue rising.
     

  • Check Out The Number Of Distressed Properties On The Market:

    Distressed properties refer to homes that are in foreclosure, short sales, or going up for auction. A good indicator of the market's health is the volume of distressed properties. The better your market position is, the fewer bank-owned or distressed properties are on the market.
     

    Low mortgage interest rates are good for sellers. Rates that are too high can cause buyers to be priced out of the market. Many first-time homebuyers can now take advantage of the historically low-interest rates on 30-year fixed mortgages. Keep an eye out for any signs that rates are rising by checking online or reading financial headlines.

How To Use Market Conditions For Determining Property Value

Once you have an idea of whether you are in a buyer's or seller's market, it is possible to determine how much your home can sell. These are the questions you need to ask when you talk to a realtor or do your research on local housing prices.

  • What Is Fair Market Value?

    The fair value of your house is what your home would be worth in today's real estate market. This number is based on the current state of the local real estate market and local housing prices. It assumes both the seller and buyer are educated and willing to sell their home.

  • When Is It Appropriate To Call An Expert?

    It can be a good idea to get a professional appraisal of your property if you are serious about selling. This report can help you decide the best listing price. It runs from $500 to $700.

  • Should I Sell My Home In This Market?

    Nationally, homes will sell extremely fast in 2021. However, inventory is at an all-time low. As a result, your local considerations may be different.

Selling A House In A Seller's Marketplace

Positives:

  • Sell Your House Quickly: 

    In other words, your house will sell faster than it would in a buyers' market.

  • Bidding Wars: 

    Although it's not guaranteed, you are more likely to get multiple offers that could push the price up. You have more leverage when inventory is limited.

Negatives:

  • The Risk Of A Stale Listing: 

    It is a fast-paced marketplace, and everyone knows that the best homes sell quickly. Your listing may lose its appeal if it doesn't get interested immediately.

  • Deals That Fall Through:

    Have less leeway because of high appraisals. Homes that aren't selling quickly can make buyers skeptical, and they may ask why the home is still on the market.

Selling Your Home In A Buyers' Market

Positives:

  • Prepare For Your Move:

    When you are selling your home, it is easy to get caught off guard when you need to leave your house. So sometimes it is worth taking a bit more time to pack.

  • Competing With Distressed Properties: 

    A buyer's market tends to have more foreclosures and short sales, many of which were demolished and sold as-is. Buyers who are looking for a smooth transaction may find your well-maintained and non-bank-owned property more appealing.

Negatives:

  • There Is A Lot Of Competition: 

    You will need to work harder to make your listing stand out from the rest.

  • Slower Sales: 

    If your goal is to sell your house quickly, it may be difficult to find the right buyer.

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