Understanding the Real Estate Market:

Many people mistakenly rely on national trends when evaluating the real estate market. The key is to focus on and understand your local market or the market you plan to invest in.  One of our key messages to clients here at Mason Hill is that your local market most likely isn’t the best investment.  We help clients to consider the top performing markets in the US.  Here is what to watch out for...

“The housing market is booming!” “The housing market is in a downturn.” “The housing market is expected to do go up or down over the next year.” These are all statements you will hear from time to time from alleged real estate gurus on television or radio shows. Should you pay attention to these predictions? No. First, pundits are famous for getting it wrong. More importantly, these individuals are talking about national trends, not a local market. The two markets are distinctly different.

Focusing on a local real estate market is the key to evaluating real estate deals. That being said, it can be a bit tougher to evaluate since there is often less information on particular areas versus the national situation. To understand a local real estate market, here are a few things to focus on. 

 

Job growth is the fuel of many real estate markets. Where there is strong growth, there are new workers. New workers need someplace to live. A vast percentage of these people will be moving in from another area and often are bringing money from a previous home. If job growth is strong, your real estate market should be stable and showing appreciation.

New construction is another area to consider when evaluating your market. In this case, we are focusing on supply and demand. The more homes available to buyers, the harder it will be for sellers to move properties. Most communities have some new construction, but the key is to determine if it is outpacing the demand.

Las Vegas, for instance, is a city that is realizing serious population increases each year. That being said, the real estate market in the summer of 2006 was very tepid because the construction of new homes had saturated the market. When evaluating a local real estate market, try to get a feel for such an issue.

A secret to evaluating a local real estate market is to look at people in that area. One sign of a hot real estate market is the number of people who suddenly become real estate investors. These tend to be people using the equity in their primary home to make secondary purchases. There is no statistical analysis for this factor. Just keep an ear out for people who are suddenly investing in multiple properties.  Local real estate online forums and blogs are a great place to get a sense for this.

Trends in the national real estate market are interesting, but often irrelevant when evaluating the local market. Focus on your area of interest and you should be able to better evaluate whether you should sell, hold or buy properties.

If you are looking for a real estate partner, you may consider Mason Hill's Turnkey Wholesale Real Estate Program.  You can register to view properties in specific markets that are already analyzed and chart to do well in the next 12-24 months.  Our team will help you acquire, manage, and sell properties.  You can register to view properties for free at MasonHill.com.