Million dollar question: buy or sell
By Justin Hunter
It really is a million dollar question
when you are determining whether the market
is prime for buyers
or sellers because even if you are not
buying or selling a million dollar home,
your actions will eventually affect $1
million of future value or investments.
While many people determine their real
estate actions based upon the national
consensus of whether it is a buyer’s
market, it may be more beneficial to determine
your local area’s market first.
It is not a secret that the real estate
industry is kind of like a giant game
of roulette where you never know if the
market
will be red (hot) or black (cold), you
just want it to result in green.
Realty Times columnist, M. Anthony Carr
tries to take a little guesswork out of
the gambling market by providing helpful
tips for a potential buyer or seller in
his October 13, 2006 article, “How
to Tell Where Your Market's Headed.”
Carr begins his article by stating if
everyone stays clam and does a little
research, his or her real estate decision
should be a successful one.
“Many readers have accused me of
being too optimistic on the real estate
market. What they see as optimistic is
actually an attitude steeped in the belief
that you can make money in real estate
in any market, you just have to know how
to operate when the market's moving up,
leveling off, or cooling down.”
Not to treat you like a child but here
are some basics: when prices are up --
sell, when prices drop -- buy.
Basically, all you have to do is determine
whether it is a buyer’s market (it’s
easier this way), if not then it is a
seller’s.
“So last week when I read some reports
from federal agencies that appreciation
had slowed, I didn't panic with many of
the market prognosticators, I just shifted
my business plan. Real estate investors
and property owners can make money in
any market, you just have to be wise on
the market and be flexible on how much
profit you want to make.” Many consumers
are confused as to whether they should
invest in property when prices are falling.
If you approach it from a strictly business
prospective and identify the three key
components, you will be fine no matter
what you decide.
The first thing you must determine is
the local economy where you live or are
prospectively searching to live.
“What's happening? Are jobs growing?
Are businesses
opening? Are current businesses investing
in themselves? What are the economists
saying in your area? Research this data
by a simple Google or Yahoo search of
"economic report." Through that
search, the astute investor will find
out where economists are predicting growth
in suburban business centers and where
the jobs are coming and going.”
Next, you should examine the local real
estate market. Are prices rising, falling
or remaining neutral? Begin with examining
the prices on a state-wide level, then
narrow it down to the county and finally
dissect the zip code and neighborhood.
The state-wide price increase or decrease
may indicate what the neighborhood or
city has the potential of doing.
For example, if the state indicates that
prices are falling fast but the prospective
neighborhood
ahs not yet changed, you may want to wait
a while to buy until the neighborhood
prices fall as well. It would be very
unlikely for the neighborhood prices to
randomly rise and break state-wide pattern.
The last thing you should investigate
is the financial market.
“This market is actually the only
real estate component that is usually
measured on a national basis. It's all
about the cost
of money and most interest rates are within
a basis point or two from each other nationwide.
Currently, they are still historically
low (under 7 percent) which can be had
for 1 or less points.”
These three components will provide you
with the necessary knowledge and confidence
to make a real estate sale or purchase
that will benefit your financial future.
