Real Estate Market Indicators Help You Buy Low And Sell High

Knowing when real estate markets are headed into a decline or showing appreciation is the key to real estate investing. These key real estate market indicators are used by experience investors to gauge the up’s and down’s, allowing them to time their prospective real estate markets.

Key Market Indicator: Know Your Markets Home Sales

Doing your homework first will help you time the real estate markets. By understanding which properties are moving, not just laying dormant on the market, is very important. For you to understand the existing sales markets, obtain market data from your favorite Realtor. Communicating with a real estate professional about the local sales in your area should be the first step to successful real estate timing.

As you go through the home sales data, try to distinguish between garbage and great performing investments. Once you distinguish good neighborhoods with low levels of inventory and high sales ratios, you are on the right track. Lookout for properties heading into foreclosure or short sales homes, they will provide the best prices.

Key Market Indicator – New Home Starts

A New home permit is where a builder has received the okay to build a new home. These permits should be watched closely, as new construction is a great indication of real estate market up’s and down’s. As new construction permits rise, markets tend to be low on inventory, as buyers decide to build over buyiny an existing home. As new home permits dwindle, buyers are faced with more inventory, and markets tend to slack as buyers become wary. Buyers are more cautious to build as it is more risky, so watch this trend closely.

While watching the new construction starts, you can’t gauge the progress on a month to month basis, rather you need to look at trends over long periods of time. Study past decades such as the 1990′s and 1980′s to get a feel for how new construction relates to up’s and down’s in real estate. Once you feel comfortable how your area adjust’s to market trends, move onto the next real estate market indicator.

Key Market Indicator – Notice Of Default

When home owners can no longer pay their house payment, banks will move to foreclose. The first step for a bank to foreclose is to file a notice of default. You can gather this information by heading to your local courthouse or county record holders. They are the first to report the notice of defaults.

The notice of default records should provide great data for you to study, as they will tell you where a real estate market is headed. The areas with a lot of default notices you should stay away from, as sharp declines will be on the way. Not all notices turn into a foreclosure, so keep that in mind. Neighborhoods with foreclosures may have great deals, but you could lose a lot money, so be careful.

Key Market Indicator – Foreclosures And Short Sales

Buying foreclosures and short sales can be a great way to make instant return on your investment, but be careful. The more foreclosures and short sale in an areas, the more home prices will decline. Try to find neighborhoods with very few short sales and foreclosures, as they will hold value and the appreciation will come sooner.

For expert investment advice in Northern, Utah please visit Lisa Udy’s homes in Providence Utah and homes in Smithfield Utah websites. Also published at Real Estate Market Indicators Help You Buy Low And Sell High.