Our Market Advantage

The real estate market across the country has become one of the many media topics to be monitored microscopically and yet reported on very generally. Shifts in any direction create sensational headlines and news stories. Consequently, the question “How is the market?” is not an uncommon one these days.

Not all things are equal….

Realistically, the dynamics of the real estate market are very much the same as any other market. Take for example, the stock market. At the end of the day, the Dow Jones Industrial Average reportedly either closes up or down. Does that mean that every component stock included in the Dow went up – or down? No. Some go up, some go down, and some stay the same. Does that equate to gloom and doom or new millionaires? No. When stocks are down, generally bonds are up. Does everyone make money? No. Some do, some don't, and some remain the same.

The see saw effect…….

Let's say for instance that the latest headline is that the housing market in Big City A is suffering, and prices have fallen drastically. What exactly is happening in Big City A? Has a large employer relocated? Is health care in the community no longer able to meet the needs of the residents? Has the economy of the area shifted drastically? Has a natural disaster occurred? Several factors play into the equation, and each factor is volatile in itself. However, just because the housing market in Big City A has taken a downturn and has made headlines, does not mean that same shift is happening in Big City F or L, or Small Town A, B or C.. Small Town B has a different market, different factors in the equation, and its own set of variables. If everyone in Big City A is moving to Small Town B, well, let's hope we all own real estate in Small Town B that month!

The GREAT news is that Buyers interested in Big City A are probably going to be able to find some pretty reasonable pricing. The supply and demand inventory is out of balance. There are more properties than Buyers at that time. This is what is called a “buyers” market because supposedly they get the best end of the deal. Conversely, when there are more Buyers than there are properties, the inventory becomes out of balance again. Housing costs in Big City A increase dramatically, the tables turn and Sellers are able to command a higher price tag - many times involving the same piece of real estate. Now you have a “sellers” market.

Timing is everything…

Those same dynamics can affect the real estate market even on a more specific scale. Let's say the market in your community is flooded with 2 bedroom homes and has only a handful of 3 bedroom homes available to purchase. The condition, pricing, and terms of the 2 bedroom homes for sale will be much more flexible and competitive than those of the 3 bedroom homes that are less available. Another example: An influx of commerce in a community can make commercial property value considerably higher than at a time when businesses have left a community and vacancies are at an all time high. These variations in supply and demand can happen very rapidly for a number of reasons –and sometimes for no specific reason at all. Consequently the old real estate adage “location, location, location“is not necessarily the holy grail. “Timing, Timing, Timing “is much more relevant to real estate values in each unique community.

Keep in mind these variations in property value are nothing more than “paper” profits or losses unless you are actively buying and selling in the market place at that time. An appraisal during a “Sellers” market will reflect a much higher value than the same appraisal in a “Buyers” market – with or without improvements. But unless you actually place your property on the market and complete the transaction, you never personally experience the profit or loss. It's only on paper. Just like the stock market. Unless you sell your stock the day it closes at an all time low – thankfully, the loss is only on paper.

Let us help!

Seem a little overwhelming? With the inevitable changes in the housing market, the value of a personal Realtor to help you in the process of buying or selling becomes even more important. Advantage Realty monitors the real estate market in the area weekly to stay current on conditions, trends and inventory. Visiting with your Advantage Realtor about the local market conditions will provide you with the knowledge you need. Let us help you make decisions you can feel comfortable and confident with through out your listing period or buying experience.