Understanding Real Estate Cycles
The dynamics of the real estate market can be hard to understand. Like all markets, real estate is unpredictable and changes in market conditions can have profound impacts on the financial situations of millions of people. This article will take a closer look at cycles in the real estate market and what they mean for your buying and selling decisions.
Whether you are looking for luxury homes in Greensboro or are at the stage to seek out a starter home, working with Smith Marketing is your best bet. As Allen Tate Greensboro Realtors, the team at Smith Marketing is fully qualified to serve you.
Four Distinct Categories
By the definition of the word “cycle”, we can already understand a little bit about this topic. Something that is cyclical moves through various repeating steps or stages, and the pattern of that movement tends to happen over and over again. While real estate doesn’t operate as an entirely authentic cycle, in that it isn’t perfectly repeatable, there are four cycle stages that are generally identified by economists that study markets that can be identified and monitored.
- During this phase, measures of vacancy are declining and little new construction is taking place
- This part of the cycle will see vacancy still declining but new construction taking place, as well
- Here, vacancy is going up, and yet construction isn’t slowing down
- Those new construction projects arrive on the market and vacancy goes up even further
While it can be helpful to monitor market conditions to see what phase is currently taking place, it can be hard – or nearly impossible – to figure out how long one phase is going to last before another takes hold.
Much of the difficulty in terms of evaluating the cycle of the real estate market comes down to how many variables influence the behavior of the market. For example, interest rates have a strong impact here, with higher rates typically keeping people away from shopping for a new house. Also, the health of the economy as a whole plays an important role, since people having well-paying jobs are more likely to be able to purchase houses and other forms of real estate – meaning prices will probably rise over time.
Finding Your Place
Monitoring the cycles of the real estate market is only helpful if you are able to use this information to your advantage in some way. Different parts of the cycle present different opportunities for those who are positioned to jump into the market at just the right time. As an example, when the market is in a recession, buyers might be able to secure a great deal on a rental property to hold for the long term. Then, the cycles come back around and rents go up in the area, that property could become far more valuable than would have been indicated by the purchase price (since it was purchased in a recession when the market was down).
Thinking about making some real estate investment purchase, or just trying to decide when the time is right to buy your own home? Smith Marketing is ready to help, so get in touch today to learn more.
Factors That Influence Your Home Appraisal Value
When getting ready to sell a home, you naturally want that property to appraise for the highest possible value. This is a big opportunity to improve your ROI on your investment, especially if you have owned the property for years and have built up some equity along the way. Looking at other houses for sale will give you a starting point for how yours might be valued, by a proper appraisal is the most accurate approach.
Smith Marketing carefully tracks homes for sale in the Greensboro, Summerfield, Oakridge and surrounding Triad areas, and their expert team is standing by to help you track down a great offer to close this deal. Reach out today to learn more.
This is the best place for this discussion to start. Simply put, the prevailing market conditions in your area are going to have a huge impact on how much your property is worth. The exact same property with no changes at all could be worth $200K in one market and $250K in another, for example. The appraisal will pay close attention to present market conditions and comparable properties that have sold recently in the area.
Size and Layout
Square footage is always going to play a big role in how much your home is worth, as well. Properties within a given area will generally sell within the same price-per-square-foot range as each other, with minor changes to that price point based on various other factors. For example, if a 1,000-square-foot home is valued at $200,000 in your area, a 1500-square-foot home may be valued at around $300,000, as that would maintain the same $200/square-foot price (or whatever the going rate happens to be).
In addition to raw square footage, the value will be impacted by how that space is divided. How many bedrooms are included in the design? Families that need four bedrooms may automatically rule out all three-bedroom layouts, meaning there will be less competition in the three-bedroom market. If all else is the same, a house with more bedrooms will usually sell for more than one with fewer bedrooms.
Age and Condition
Unlike most other things that are sold, age is not necessarily a bad thing when it comes to a house. In fact, many buyers like the styling and charm of older homes, so the market for these types of properties can be quite strong. However, that charm will quickly fade away if the house is not in good condition and needs quite a bit of renovation work. So, the age and condition of the structure will be considered together to determine how much it is likely to be worth.
Location, Location, Location
The location will inevitably play a huge role in the homes’ value. Location not only relates to the big picture of what city and county the property is in, but also in the more narrow sense of how it is positioned within a neighborhood. For instance, a house that occupies lakefront property is going to be worth more than a house across the street that doesn’t have lake access.
Need help navigating the complicated real estate market? Turn to Smith Marketing today to get the professional guidance you desire.
What Realtors Do for Home Sellers
Selling your home is an exciting and intimidating process. There is a good chance that this sale will represent the largest amount of money you ever receive at one time in your life – so you want to be sure to get it right. Working with a licensed Realtor is one of the best ways to make that happen, and this article will highlight exactly what the best Realtors in Greensboro have to bring to the table.
Putting Allen Tate Realtors on your side will make this a more enjoyable, and less stressful, process, so get in touch with the team today to learn more about how they can help you secure great offers for your property or help you find the next home for your family.
Determine a Value
One of the most important things to do when putting a property up for sale is to nail the listing price on the first try. It can be tricky on your own without the help of a Realtor to figure out how much to ask for your home. If you price it too low, you might wind up leaving money on the table – but overestimating the home’s value could leave you wanting for offers.
Teaming with a Realtor will make it easy to figure out how much you should ask for when the listing goes live. An active Realtor understands market conditions and will be able to use comparable sales in the recent past to establish a fair starting point for your home. That doesn’t mean you will sell the home for exactly that price, after all, but being on the mark will make strong, competitive bidding more likely.
Putting Your Best Foot Forward
You want to make sure your house is ready for “showtime” when the listing goes up and people start to check it out. Your Realtor can help you make minor changes that might improve curb appeal and other factors while helping you avoid wasted spending on things that just don’t matter much in the end. Taking that little bit of extra time and effort can go a long way in the battle for the highest possible offer.
Getting the Word Out
Even with an accurate price and nice staging, your home isn’t going to sell unless people know how to find it. A Realtor with strong connections to the local market can promote the property to other Realtors so they can tell their clients to come see it in person before it sells. You might even work with a Realtor that has a strong online presence established and can use some digital marketing techniques to make sure the house is seen by as many interested parties as possible.
Closing the Deal
Accepting an offer and finalizing the sale of your home is a stressful time. There is a lot of money on the line and the paperwork needs to be finished up correctly to get it all done. Using a Realtor like those at Smith Marketing will put your mind at ease knowing that the little details will be handled properly and the transaction will be a success.
Realtor vs Real Estate Agent
According to the National Association of Realtors website, “REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics.”
Is the Real Estate Market Going to Crash?
It seems that everyone is always trying to predict the next real estate market crash. Of course, the market has experienced crash events previously, so everyone from agents to homeowners has a vested interest in determining when the next one is coming around. Is it about to happen? Can this type of event even be predicted? The article below will explore this important topic.
If you are shopping for Greensboro real estate, reach out to Smith Marketing right away for assistance. Smith Marketing has extensive experience helping people buying and selling homes in Greensboro, and that proven track record can come to your aid for an upcoming transaction.
The Simple Answer – Nobody Knows
No one knows accurately when, or even if, the real estate market is going to crash. If someone is telling you that the market will crash by a certain time, feel free to ignore them. It’s simply very difficult to predict such a complex market with precision. Sure, people can make guesses, and some of those guesses might wind up coming true, but that doesn’t mean that the predictor truly knew it was going to happen.
Think of it this way – if someone knew, for certain, that a real estate crash was imminent, that person would be able to become immensely wealthy by making the right investments in advance of that crash. The reason people don’t regularly become rich off of these events is because they are extremely hard to predict.
Change Your Thinking
It doesn’t really do any good to think about the possibility of a crash, as you simply won’t be able to know if it is going to happen. So, does that mean you should stay out of the real estate market entirely? Of course not. Rather than worrying so much about market conditions across the board, spend more time thinking about your personal situation and what move makes the most sense for you.
In other words, do you have the necessary down payment and income level to afford a suitable home in this market? Do you plan to stay in the same place for many years to come? If you’d like to set down roots, and your financial situation is appropriate for buying a house based on current pricing, considering home ownership is certainly worth your time.
A Long Game
Over the generations, owning a home has proven to be a reliable investment over the long term. That doesn’t mean there aren’t going to be bumps along the way. It’s entirely possible that the value of your home will go down at some point, and it will likely rise more often than it goes down. While there is never a guarantee of a positive return from any kind of investment, those who own a house for 10 or 20 years (or more) are typically quite pleased with the financial results of that decision.
Making a sound decision on a potential real estate purchase or sale comes down to thinking through your options and working with the right team. Contact Smith Marketing today to get started on this journey with an experienced real estate partner by your side.