How Local Real Estate Markets are Affected
There are many things that that come into play when considering how real estate markets are affected. If you are buying or selling a home, even seemingly small news may have a major impact on the marketplace. Of course, the news that may affect the prices of homes is often more local than national, but keeping an eye on events in your community provides a leg-up when selling your property. Here are five of the most common ways that local news or events may affect the price of homes in your area.
Supply and Demand
Arguably the most common impact is the ratio of supply and demand on the real estate market. If your community has few homes for sale and the demand is high, then as a seller you are in a good position to make a considerable profit. Of course, the opposite is true if there are lots of homes on the market and relatively few buyers. In addition, the number of foreclosures and properties owned by banks in a community has a powerful effect on prices. If you are selling a home, be sure to go over the market to see if the conditions are favorable or not.
Local Conditions
Sometimes called demographics, this is really about the current condition of the neighborhood in which you are selling your home. The considerations that go into the demographics include, but are not limited to the following;
- Unemployment
- Crime Rate
- Strength of Schools
- Mill Rate
- Tax Rates
- New Housing Permits and More
All these factors play a strong role in how well your home will sell in the neighborhood. Knowing them means you can adjust your expectations and if you can find ways to address one or more, it may make a positive impact.
Short Sales and Foreclosures
While the numbers have been greatly reduced since the housing market crisis in 2008, there are still many places that have yet to fully recover. Foreclosures and short sales are mostly properties that sell for far less than the average value of the home itself. Look for changes in the numbers to see if they have improved in recent months. That will be an indication of a healthier selling market.
Average Number of Days on the Market
The average number of days homes are on the market gives arguably the single best piece of information that you can use. The longer homes are on the market, the more difficulty you will have in selling your property. Keep in mind that the average number of days will change due to varying factors, but it does give you a snapshot into the real estate marketing at least in your community.
Cost
Basically, the more prices are rising in your community, the better it is for selling your home. This means that demand is up and putting your home on the market becomes a better idea. Falling prices however, are not good for your chances at selling your home. That means demand is down and you may have to drop your price to sell.
Understanding how local real estate markets are affected by different factors will help you better sell your property.