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7 Strategies To Evaluate A Local Real Estate Market Before Buying Or Selling

Every home buyer or seller will want to save and earn a lot of money when acquiring or selling a home. For buyers, one way to buy a home as cheaply as possible is to evaluate the housing market first. The same goes for a home seller if they want to gain profit from selling a house.

So how exactly does one do that? Here are simple strategies that you can use even if it’s your first time.

1. Use the internet with keywords

A good strategy of using the internet to evaluate a real estate market is to use specific words when searching. One example is, “What’s it like to live in (area name or zipcode)?” or “How much are the houses at (area code or name).” 

Your concerns will help you get an immediate and clearer view of the issue you’re looking for.

2. Search for quarterly market data

If you want to study a large area of a seller’s market, some brokerages can share quarterly market reports that will benefit you. These reports may be from the past but are accurate and will help you predict future pricing trends.

You may also ask for current contracts if they allow sharing these kinds of info.

3. Check “Zestimate”

Zillow’s “Zestimate” isn’t 100% accurate when pricing homes. However, their system and services can still be useful if you want to know whether a market of an area is heating up or cooling down. All you have to do is enter your home for sale or the house you want to buy here.

4. Pay attention to pricing trends

When Zestimate doesn’t make you feel comfortable with their data, you can consult with a real estate agent for a market trend in the housing area you desire. Agents and their brokering agencies have complete, accurate, and updated data that you can readily use for studying.

They also have data from the previous year or period that you can compare to the recent information. During comparing, determine which are the conditions that caused a rise and fall in the house pricing. 

Look at the current situation if it’s similar or different. Then use your comparables as the basis for a market forecast.

5. Observe the sales and purchases

Along with the data you’ve got from the real estate agent, see if the sales and purchase of an area are strong or weak. A lot of purchases in a buyer market can mean a rising housing price which doesn’t necessarily mean a rise in future value. 

A huge amount of sales in a seller’s market will also show a dropping housing price which doesn’t necessarily mean a massive loss of future value. However, if a lot of houses for sale sit for too long on the market, that could forecast a very low chance of market recovery.

6. Understand the housing supply

Housing supply also changes the pricing of its market. A market that has a few homes with a lot of demand could mean that other homes will increase their pricing. A market that has too many houses for sale or foreclosures yet lacks demand is a prediction that pricing will drop.

If you’re a home seller and your market lacks supply, you should go to the market with high demand to sell your home at a good price. For buyers, go to a market that is abundant in homes but with less demand to get a good deal.

7. Study the employment rate

Lastly, you must study the area of your property by using its data on current and future employment rates. If the neighborhood’s households are losing their jobs, that could mean a massive sellout. As a seller, you should get your house sold as fast as possible. As a buyer, it might not be a good investment, unless job opportunities open again.

If a property is near an opening factory, that could mean people are coming in for jobs and will buy homes. If there is a limited supply of homes in neighborhoods with increasing demand, the price of houses will rise. This could bide well for a seller but not for a buyer.

Evaluating a local real estate market isn’t that hard. It’s just your basic law of supply and demand. If the supply is low with high demand, houses will be expensive. If the housing supply is high with low demand, houses will be more affordable. And if you’re too busy to evaluate a housing market, hire a real estate agent to do it for you.

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