When Should I Buy?
Timing your entry into any real estate market requires the careful analysis of data coupled with a careful SOUL SEARCHING to identify the conditions that, once recognized, will compel action. It requires asking and answering important questions related to:
- What are the needs of you and your family
- What are your personal goals
- What is affordable
- What are the current market conditions
Timing any market (searching for a bottom) has always been historically difficult….just ask any stock market investor. It requires lots of homework and careful consideration of ones market confidence through an understanding facts.
Understand that only the very lucky buy at the bottom of any market. Most find themselves somewhere on the upslope because of the media (our most common source of market info). Unfortunately, the media has about a 6 month lag before they realize that market conditions are improving. The trick is calling a bottom or concurrently deciding that the price point/value ratio has optimized to a point where you begin to have confidence. It is important to recognize that opportunities exist in all market conditions…….it just depends on the opportunity that you are looking for.
Factors that we use to call a bottom include:
- A downward trend in housing inventories. Most experts agree that a 6-7 month supply of homes in any given price point and/or area represents an equilibrium, less supply represents a sellers market…..more….a buyers.
- A downward trend in Short Sales, REOs (bank owned properties) and Foreclosures
- Stabilization of Developed Lot Inventories and Prices