Timing Is Everything: Buying and Selling Strategically in the Real Estate Market
As with most anything that we try to meticulously plan, aiming to accurately predict and understand the ebbs and flows of the real estate market isn’t always the simplest or most successful task. That said, there are a few ways to get a clearer insight into where the trends are headed, what the future forecast holds and how to time a major move, such as buying or selling, at the most ideal time.
As time goes on, experience and know-how play a major role in how many times you get the timing just right. Understanding this strategy can help you negotiate better terms on your offer, score a valuable property at a great price point, and more. Today, let’s take a look at a few simple ways you can improve your knowledge on real estate market timing to make a more informed decision.
Choosing Based on the Calendar Year
Start by narrowing down your search to the city or neighborhood that you want to buy or sell in. Then, research real estate trends from the past five years for that area. As you do, take note of any patterns you find that pertain to the calendar year. For instance, have there historically been more homes sold in the springtime months or is autumn a hot time of year in that locale? In many cases, this can be as simple as logging online and perusing a site such as Zillow to get quick access to the basic data you’re looking for.
Though there are always plenty of exceptions to the rule, the general consensus is that the summer is typically the best time to sell, specifically during the months of April to August. This may be because the end of August marks the beginning of a new school year, and most buyers want to be in their home before school begins, so they can be sure of the district they’re in. The summer is also a great time to deal with the hustle, stress and chaos that moving can bring, which is easier to handle when families aren’t juggling busy school schedules as well.
To find a great deal on buying a home, try to plan it around any other time of year besides the summertime. Most people want to be settled into their new place before the cold weather hits, so you may be able to score a deal on local properties during that time.
Deciding on Rural Versus City Living
Of course, if you choose to live in a more rural, country setting, it goes without saying that your inventory might be a little lower, and thus prices may be higher, no matter what time of year you’re buying or selling in. Along the same lines, if you’re in a more urban location, the market will likely be healthy and thriving all year round, so trying to pinpoint a specific time to make your move might not be as necessary.
With so much demand and so many people clamoring to live in the city center, a property in a prime city location can almost always sell at top dollar. Still, thorough research will reveal that supply and demand peaks and dips during certain years. You can use this data to inform your decision.
Deciding Based on a 10-Year Timeline
If you aren’t in a time crunch and can afford to be a little more flexible with your move, research the real estate market trends in your locale of choice over the past 10 years. More than likely, you’ll find that the market swings up, making it a great time to sell, for about three years, and then swings back down for the same amount of time, marking the ideal time to buy. Rarely does any location have a decade-long pattern of upticks with no dips.
Not sure where the market is headed moving forward? Take a look at how much homes are going for near you. As prices peak and interest rates continue to climb, it stands to reason that the next buyer’s market is soon to occur. Why? With so many properties sitting at a price point that most prospective home buyers can’t afford, their buying power is therefore compromised.
Analyzing the Job Market Outlook
Another factor that can determine the timing of the real estate market is the state of the economy and the job outlook. If the unemployment rate is low and the economy is up, so too is buyer confidence, leading to higher home prices and fewer rentals. Conversely, if those elements are in a downswing, buyers are more cautious and risk-averse with their money, leading more to rent rather than buy.
When this happens, it becomes a buyer’s market, as home sellers are forced to make their properties as attractive as possible to any would-be buyers looking for a new place. When supply is up like this, but demand is low, it makes for the ideal time to make an investment in this space. You can often snag a great deal on a great home that may just need a little TLC If anything at all. Then, when the market turns back around, you can rent or sell the property for a significant profit.
Making Sense of the Market Timeline
While it may be next to impossible to understand the real estate market trends all of the time, an informed home buyer, seller or investor will take the time to research trends and predict patterns before moving forward with a decision. Taking the time to perform this step can help you more strategically schedule your next move, plan out your future and keep the process as affordable or profitable as possible.