Market – Understanding the Housing Market
You hear things on the news all the time ”It’s a buyer’s market,” “It’s a seller’s market,” or “The housing market is on the rebound.” You might understand the basics of what they are talking about but there is much more to it than that.
First let’s start with the “Market” blanket statements.
When people say “The Market” they are usually referring to the buying and selling of real estate by consumers. Just the regular public buying and selling homes. When talking in terms of up and down. They are talking about homes values. Think about it like the stock market. If it is a buyers market that would mean that prices are lower and if it is a sellers market then prices are high. One very important thing to keep in mind is that these are blanket statements made by the media. “The market “ can be very local. I don’t just mean from state to state either. What is going on in Queen Creek may not be the same as Mesa.
How inventory affects value
Every product has a certain supply and demand. This is going to have a direct effect on pricing. The more homes that are available will change the way buyers look at the market. When you look at and area like Queen Creek for example. The area still has room for growth. There is lots of new construction along with resale. A higher supply of homes will change a buyers expectations. They are going to be more picky about what they want and how much they are willing to pay. When you look at older areas like Mesa. There is not as much new construction. This will make newer and nicer homes worth more due to lack of supply. The amount of inventory will also have a direct effect on how quickly a home sells. The more to choose from usually drive the average days on market longer.
When you hear about “distressed properties” that means homes that are under water. You hear this term more frequently in the auto industry. It means the homes current value is worth less than what a borrower owes. There are typically two types, Lender owned and Short sales. A lender owned is just what it sounds like. The lender has taken possession of the home and is either selling it to the general public via the MLS or is selling it at auction. A short sale is when the borrower is working with the lender to sell the house at current market value and settle the remainder of the debt. These types of homes are not the amazing deals that they once were. Lenders have really tightened up over the values and are keeping more in line with the rest of the market.
Overall I feel it is best to speak with a professional that knows the market in the area in which you are looking to buy or sell. They will be able to give you the best and most current information on your market.
For more information about Big Mike or RE/MAX Home Expert Realty, please visit www.DownHomeAZ.com or give Big Mike a call at (480) 720-0730