More than ten years after the housing market crash of 2008, many still harbor worries about owning real estate again. Some experts say that the housing market has reached its post-bubble peak. It’s understandable that many people are watching housing market trends intensely.
At TwinCity Lending , we know that the decision to buy or sell property can be nerve-wracking. You can rely on us to make this process work for you. We are your expert mortgage team, and we have you covered even in a turbulent market. Give us a call to discuss your lending needs.
Housing Market Basics
Although the actual workings of the real estate market are complex, the core system is quite simple. The housing market is what came about after the time of lords and ladies, during the industrial revolution, as people began buying and selling property. Just as with all commerce, housing relies on someone wanting to sell and someone wanting to buy.
A buyer’s market comes about when there are more properties for sale than there are buyers ready to purchase. This market gives the buyer a lot of choice and time to consider many options. It also puts them in an excellent position to negotiate a lower sale price. In essence, sellers are competing against each other to woo a willing buyer. Homes may go unsold for more extended periods during a buyer’s market.
Surprising no one, a seller’s market is the exact opposite. There are more buyers than there are houses available for purchase. In this case, the seller has the upper hand in a transaction. They can ask a higher price and may even benefit from a bidding war among prospective buyers. Days on the market often are minimal in this situation.
When the housing industry experiences a balanced market, there is about three to six months’ worth of inventory listed. This situation is ideal and often happens in the time between the buyer’s and seller’s markets. A balanced period of sales often is relatively short compared to the other two.
Is It Time to Give Your Market Watch a Break?
For a lot of people, it can be helpful and exciting to keep close tabs on the housing market news. They enjoy the daily updates on trends, interest rates, and other data. Some watch the market only out of curiosity. But most watch the market to help them determine a good time to buy or sell.
But is it possible to pay attention too closely? Probably. Here are four reasons you may want to take a break for a while.
1. You may be ignoring historical data.
As market watchers focus on every nuance of the rise and fall of property values, they can lose sight of historical trends. Daily looks at the housing market news only provide snapshots of the market.
To make the most informed decisions possible, you also need a long-term view. What has the market done historically over the past five years? The past decade? Even longer? Overall, owning real estate has proven to be a consistent, successful way to build wealth. Getting bogged down in the daily ups and downs can paralyze you from making a decision.
2. You may be relying too much on the fed’s movement.
Interest rates matter. Yes. No one can deny that. But basing all of your property buying and selling decisions on the movement of the Federal Reserve isn’t necessarily the best plan of attack.
Small rises in the interest rate do not add a significant amount to the total repayment amount of the mortgage. The difference is more evident in the monthly payment, and this is what can give some people a reason to pause.
But it still is a good idea to take a broad, long-term view as much as possible. Motivated buyers will be ready to purchase even when they see slight interest rate changes.
So don’t let the fed’s movement dictate all of your real estate decisions. Reach out to the experts at TwinCity Lending to see how rate fluctuations will impact your potential property purchase.
3. You may be looking too closely at national data rather than local trends.
Real estate is a highly localized commodity. Most housing market news focuses on national trends, but this does not give you the information you need to make decisions in your market. How hot or cool the market is in San Francisco doesn’t help you if you need to buy or sell in San Antonio.
And even within one city, there can be drastic differences in the market. Changes in urban growth boundaries, the influx of new industry, and school rankings all can impact the hyper-local real estate trends. If you want to be a market watcher, try to keep it local.
4. You may experience decision paralysis
Let’s face it. You could spend every day of your life poring over real estate and housing market trends. You could learn every nuance of how the fed makes its rate decisions.
You could have notifications alerting you to any change, up or down, in the market. You can watch housing prices around town and around the country and wonder if it’s the right time to make a move or to jump into the world of real estate ownership.
But at some point, focusing solely on the data could paralyze your decision-making abilities. With so much information coming at you, you run the risk of never getting to the point where you feel confident choosing to buy or sell.
If you don’t ever allow yourself to go for it, then what is the use in spending all that effort paying attention to trends? Eventually, it’s ok to jump on in.
TwinCity Is On Your Side
Whether you are a watcher or are ready to take the leap into buying, the concierge lending team at TwinCity Lending is here to help. We are your go-to experts for home loans, VA loans, refinances, and reverse mortgages. We have the knowledge and compassion to make your lending experience perfect.
Reach out to our team today so you can start your real estate adventure.