Navigating the Highs and Lows of Real Estate

Nov 16, 2017 by

You want to buy a house, but you also aren’t sure if now is the best time. Is the market going to change, and, more critically, is it going to go up or down? Which way are things trending? The real estate market is a complicated beast. It’s not something you want to take on alone. You may think you have it all figured out, only to find out that you’ve missed something absolutely vital. It can frustrate even the most savvy veterans, which is why you need a team of experts on your side.

City trends

Broadly speaking, there are two types of markets: a buyer’s market and a seller’s market. The former means that housing prices are low and houses are plentiful. That offers buyers the advantage, since sellers are more likely to be willing to make a deal. By contrast, a seller’s market indicates that prices are rising and houses are hard to find because they’re getting snatched up not long after they’re placed up for sale. That means sellers have the advantage and are more likely to be able to drive a hard bargain.

A city could be experiencing a seller’s market just about everywhere (think of places in the New York City or San Francisco area). Or it might be more of a mixed market, with some neighborhoods exploding in popularity and other neighborhoods that seem to be declining. You need a real estate agency that can help you figure out why certain neighborhoods are hot and others are not. The best kind of agency is one that has been around a while. They’ve seen just about every possible high and low. Some things are impossible to predict, unfortunately, but sometimes a real estate bubble is very obvious, and if it’s about to pop, that means you should wait. You don’t want to buy a house for four hundred thousand dollars only to see the market die suddenly. If that happens, you could be looking at an underwater mortgage, which can be a real nightmare. Underwater mortgages are when the house’s valuation is worth less than what you owe on it. If you owe three hundred thousand dollars on a house that’s suddenly only worth two hundred thousand, that’s bad.

For that and other reasons, you want to be very careful before you take out a mortgage. Work with a bank that will be honest about your options. For many customers, a fixed-rate mortgage is best, while other customers will benefit from an adjustable rate. The latter tends to be a better fit for people who are looking to sell or refinance within a few years of purchasing a home.

It’s best to buy a house within your means, obviously. A house should be something you can enjoy, not something that becomes a burden. If the market is fluctuating wildly, you may be better off waiting a bit and seeing if things stabilize. If you’re dreaming of owning a house, it can be tough to be told, “Not yet,” but sometimes it’s best to hold back a bit. A lot of times, the situation will clear up if you give it time, and when it does, you’ll be able to confidently sign the paperwork for your dream home.

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