What makes for a buyers market?
For starters, interest rates have to be low. That’s just one of the factors, and you have to look at all of them to find the right property at the right location and at the right time. Let’s unpack a buyers market and what you need to know.
First, it’s important to understand that there can be a buyer’s market both nationally and locally in two different ways. That technically means there are four different ways of looking at the matter, and they all have an impact on each other.
You can certainly see how the national market is going to have an impact on each of the individual local markets. You can really take things a little further, too, if you start comparing the national market to the global market. It’s a big world we live in, right?
Let’s leave out the global market for purposes of this article, however, and let’s focus on the national real estate market first. It was mentioned that interest rates are still low. That definitely attracts buyers. With the Fed raising interest rates consistently in recent months, however, it is slowing some of the local markets down.
Why is it slowing some of them down?
Some local markets have been red hot, while others are still building back up. Those markets that are red hot are more prone to slowing down when interest rates really start to be on the rise. The other markets that are still building up might weather the interest rate storm so to speak for a while.
One reason for that is because while the market is still building up, there will be more houses available at lower prices. In a red-hot market, fewer houses are available and property values will have already risen significantly. That’s something you want to watch out for when you are deciding on which local markets to search out properties.
You might think that it only has to do with the individual cities. In smaller cities, that can be the case. Yet you can look at individual neighborhoods in larger cities and find out that they have their own markets. You can also look at real estate markets by county and state.
When you look at markets through different lenses, you get the bigger picture. You might think the bigger picture is looking at the national market or that the better picture is looking at the local market. Yet you need perspective, and the more knowledge you have about the real estate market, the more perspective you have.
Comparing local markets in the same county can tell you more about whether or not one of them is specifically a buyers market. This is specific information that you couldn’t get any other way. Do you see what I mean?
If you think about it, it’s not so easy to grab a property when a local market first becomes a buyers market. It’s the same principle when it comes to buying stocks. People, in general, are more prone to buying high and selling low.
It’s not as difficult to realize it’s time to buy in a market that is gaining speed. That is one reason why when it comes to the real estate market overall, interest rates are a good Real Estate indicator or signal.
Think of the real estate market in stock market terms again. All these other little factors are hard to discern. Yet low-interest rates for the real estate market are like seeing a nice healthy blue-chip stock that has paid a stable dividend for decades.
There is a historical track record for interest rates when it comes to real estate. Where they stand now, interest rates still signal a buyer’s market across the board. Yet that doesn’t mean you are going to find the same deals everywhere.
There is much more to buying a property than just securing a good interest rate. That’s a great first step and a great first indication that you are indeed about to enjoy a buyers market. Yet you are going to have to do your digging to find a good individual property to purchase.
Are you ready to begin your search? Are you going to do what it takes to find the right buyer’s market in your area? You are going to have to really look high and low for the best property, and that’s aside from identifying the market. That being said, it’s supposed to be fun, even though you are making an important investment decision.
There are certain indicators that have been talked about so far, and there are even more to discuss. The real estate market is a business world that could and has filled many books. There is much for you to learn, even if you are just buying a home and you’re not investing in multiple properties.
If you need further convincing, just think about the many people that were affected by the housing market bust over a decade ago. The ramifications of that market disaster are still being felt today. It is what has facilitated in part the buyer’s market that people are enjoying now.
The market is right, but the economy is not. You have to watch yourself these days more than ever before. Everything is so expensive, and most people out there are hurting financially, which leads me to the last piece of advice: Whether you are an Edmonton business or elsewhere, it has to be a buyers market for you personally.