The economy works in a cycle and each cycle has an effect in the prices of goods. Each industry has a unique 'market cycle' generally follows the whole economic trend and real estate is no exception. Most people consider the home and property industry to have two phases: the buyer's market and the seller's market. Knowing which market the industry is in can benefit you as a homebuyer.
Houses are generally affordable in a buyer's market and it's easy to get a loan since interest rates are lower than average. You may even see numerous 'For Sale' signs in front of homes.
In a seller's market, people might state that the home and property industry is in crisis. It would be hard to spot affordable deals and some sellers might organize exclusive lotteries wherein select buyers bid on exclusive homes.
Buying a home in the right market cycle can give you more value for a home compared to its purchase price. The only problem is "cycle phases are much easier to pinpoint long after the fact", according to Barron's 'Smart Consumer's Guide to Home Buying'. They further explain that "if you know what to look for, it's easier to figure out the state of the market." Look for these market indicators to guide you in the timing of your home purchase:
As mentioned, 'For Sale' signs are everywhere in a buyer's market. At this time, sellers are giving incentives, such as concessions and discounts, to sell their properties quickly. There would also be an increase in the number of foreclosures and high-priced, quality homes will be sold for lower-than-average prices.
Expect to see very few 'For Sale' signs in a seller's market. Prices of homes are relatively high and sellers within the same neighborhood employ competitive selling tactics. There are a lot of people who 'flip' homes; buying and renovating a home and quickly selling it. Many rental complexes are also converted into condos during this cycle.
The best time to dive in and purchase a home is during a buyer's market. It's pretty obvious but as a buyer, you would want to buy a home at the lowest possible price. Most sellers will give discounts and other incentives for you to make an offer. Just keep in mind that you still need the guidance of a professional realtor to navigate the market and find the right home for you, especially if you are a first time homebuyer.
Homebuyers must have a strategy to help them out in the entire homebuying process. Homebuyers are advised to look for market indicators, work with a professional and do their own research to come up with a plan and choose their best option.
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Buyer's market or the seller's market, when you are looking for homes for sale in Colorado Springs, you should hire a reputed Colorado Springs REALTOR to help you find the right Colorado Springs real estate property that will suit you in every respect. If it's a commercial real estate that you are interested in, you need to see Mike Stuard for all your Colorado Springs commercial real estate needs.
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