First time real estate buyers prefer to stay away from real estate trends. The process of identifying the right property and finding the cheapest deal can be very complex. In such a scenario, making use of common real estate trends can help a lot.
The average listing period of properties available for sale in a city or region is a very important real estate trend. This time period refers to the duration for which a property remains listed before the sale is finalized. If the average listing period for a city four months, then it takes an average of four months or 120 days for the property to be sold after being listed.
Of course, the actual period may differ depending on the property. What should you do if a home has remained unsold for twelve months after being listed? It is obvious that you find determine the reason for the delay. Is the seller asking for a lot of money? Is something wrong with the property? Is the locality undesirable? Real estate trends can give you clues about hidden facets and aspects about the property deal.
Another important trend is the number of homes available for sale. More homes means that you will have more options. Fewer homes means that you should be prepared to pay more for your property.
Try to combine different factors to understand the real estate market in question. Compare average listing period with average number of houses on sale in the city or region to determine whether the market is operating in favour of the buyer or the seller.
What should you conclude if average listing period and average number of homes on sale are significantly higher than the State or National average? You can arrive at the following conclusions
a. There are a lot of sellers in the market
b. There is a long waiting period for finalization of the sale
c. It is a buyer friendly market
d. One should consider multiple options because a cheaper and better deal may be around the corner.
However, you should not be in a hurry to jump to favourable conclusions. Many first-timers interpret data incorrectly and end up missing good deals. Let us take the scenario stated above. Now, let us add consider an additional factor- interest rates. What if the average interest rate for a 30-year fixed mortgage is higher than the national average?
This additional factor will change everything. Under normal circumstances, low demand and high supply of real estate will pull down interest rates. If interest rates are high, then you are probably looking at a market where ordinary rules do not apply. The listing period may be higher because buyers are probably finding it difficult to get affordable loans.
It is important to understand the limitations of real estate trends. Do not expect trends to locate the perfect deal. Rather, use trends to understand the market properly so that you are in a position to negotiate and bargain in a sensible manner. You also have the option of going in for rented property if you find that all the trends are favouring the sellers.
Author Resource:
Hong Leong Garden will be revamped into a new mixed development up to 12 storeys of residential and commercial units. You can find out more about other new launches in Singapore at Propertychatter.
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