Buying or Selling Because of Real Estate Prices
- Date: 2007-03-09 - Word Count: 436
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If you are considering buying or selling, you are probably noticing price movements in your area. The question is how big a role these movements should play in your decision to buy or sell.
The first rule of real estate is, of course, location, location and location. The second rule in the minds of many has to do with pricing issues. Specifically, is the real estate market trending upwards or downwards? Considering pricing trends is a smart move, but fixating on them is not.
Why are real estate pricing trends so discussed? Well, it all has to do with getting the best possible deal. For buyers, the goal is to buy property when prices have bottomed out. The buyer can then reap the benefits of appreciation when the prices eventually start rising again. On the flip side, sellers are looking to sell when property prices are at the top of the market. Doing so, of course, maximizes the profit in the property being sold.
While pricing trends are something to note, they are not nearly as critical as people think. First off, it is important that you focus on the correct trend. National price trends up or down are not all that important. The local price trend may differ. If prices are dropping 10 percent on average across the nation, it doesn't really matter to you if prices are up 5 percent in your area for the same period. In short, think local.
As a seller, trying to time the real estate market can be a catch-22. Yes, you want to sell at the top of the market to maximize your profit, but there is often a subtle problem with this approach. Once you sell, you are probably going to want to buy another home to live in immediately! If you sell at the top of the market, you are also going to buy at the top of the market. In short, it tends to be wash transaction. You could rent for a bit until prices drop, but most people move home to home as quickly as possible. This makes pricing trends pretty irrelevant.
At the end of the day, trying to time the real estate market is a futile gesture. You can do so in a general way, but you will never buy at the absolute bottom of the market or sell at the absolute top. Real estate has always appreciated over time, so focus on location and don't get too caught up in pricing trends.
Raynor James is with FSBO America - get a free one month listing when you sell for sale by owner.
The first rule of real estate is, of course, location, location and location. The second rule in the minds of many has to do with pricing issues. Specifically, is the real estate market trending upwards or downwards? Considering pricing trends is a smart move, but fixating on them is not.
Why are real estate pricing trends so discussed? Well, it all has to do with getting the best possible deal. For buyers, the goal is to buy property when prices have bottomed out. The buyer can then reap the benefits of appreciation when the prices eventually start rising again. On the flip side, sellers are looking to sell when property prices are at the top of the market. Doing so, of course, maximizes the profit in the property being sold.
While pricing trends are something to note, they are not nearly as critical as people think. First off, it is important that you focus on the correct trend. National price trends up or down are not all that important. The local price trend may differ. If prices are dropping 10 percent on average across the nation, it doesn't really matter to you if prices are up 5 percent in your area for the same period. In short, think local.
As a seller, trying to time the real estate market can be a catch-22. Yes, you want to sell at the top of the market to maximize your profit, but there is often a subtle problem with this approach. Once you sell, you are probably going to want to buy another home to live in immediately! If you sell at the top of the market, you are also going to buy at the top of the market. In short, it tends to be wash transaction. You could rent for a bit until prices drop, but most people move home to home as quickly as possible. This makes pricing trends pretty irrelevant.
At the end of the day, trying to time the real estate market is a futile gesture. You can do so in a general way, but you will never buy at the absolute bottom of the market or sell at the absolute top. Real estate has always appreciated over time, so focus on location and don't get too caught up in pricing trends.
Raynor James is with FSBO America - get a free one month listing when you sell for sale by owner.
Related Tags: property, prices, market, real estate, home, selling, house, trends, buy, sell, buying, pricing
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