The housing market undergoes changes from time to time.
There are always trends and factors in the housing market that regularly need to be studied and understood by real estate investors that hope to make profits from whatever happenings are occurring in the housing market.
It is vital to understand the dynamics of the real estate market to be able to decipher and be informed of what strategy to use per time.
The market is always in flux, being familiar with these trends can help place you at the top of these changes
CHANGES IN THE HOUSING MARKET
Here are some of the biggest trends to get familiar with:
- Interest rates: interest rates are greatly affected by certain factors such as inflation, the bond market, federal reserve policy etc. Interest rates on mortgage influence the housing market by affecting overall demand, affordability, and prices of homes.
- Home prices: prices of real estate are affected by the availability of housing supplies and demand from buyers. The usual trend is that an increase in demand and low supply results in a rise in home prices. Usually, an increase in housing prices leads to less demand while a reduction in prices tends to attract more buyers.
- Real estate inventory: A very important factor in the real estate market is the availability of houses that are up for sale. When the inventory is undergoing a deficiency and demand is high, it becomes a seller’s market. Prices rise and bidding becomes competitive and sellers have an upper hand. In such situations, employing strategies like real estate skip tracing to locate those homes that are not yet on the market but would make a good deal can make a lot of difference. On the other hand, when the inventory is high and demand is low, it becomes a buyer’s market. In this case, the listings available are more than the available buyers and the market is somewhat uncompetitive. The current trend in the housing market is that there are fewer available homes on sale (low inventory), hence a need to invest in a quality skip tracing service.
- Affordability: Housing affordability has a lot more to do than with just housing prices alone. A lot of factors come to play that might influence affordability such as income, housing prices, interest rates, and inflation. If incomes are generally on the increase, even if house prices are jacked up, affordability might not rapidly decrease. Hence, all of these factors play their combined roles in housing affordability.
The biggest changes in the housing market of 2021 are a rapid decrease in the supply of home listing, leading to increased competition in the market today. This trend means that housing prices are generally on the rise while bidding rapidly develops into a war.
Conclusion: The real estate market is never truly stagnant and just like every other market, the real estate market also has various factors that come into play to create cycles and trends. Understanding these changes keeps you abreast with current key trends.