As time goes by history repeats itself, this is the cycle of life and its no different when it comes to the real estate market. The market has three phases; Balanced, Sellers Market and a Buyers Market. Lets explore some of the common characteristics of these 3 markets to understand more about the current environment.
During this phases of the cycle, buyers and sellers are in a relatively balanced equilibrium and houses don’t tend to stay on the market for more than a month if priced correctly. Interest rates are reasonable and there is generally a moderate amount of housing on the market. The key indicator is that properties are moving and liquidity is good if you are selling and stock is available if you are buying.
This market is best illustrated last year 2017 where the market whereas demand was much higher than supply. Houses were flying off the market with competing offers and sold way over asking. Key characteristics are multiple competing offer situations, very low days on market for housing and offers that are submitted below list don’t usually get the bid. If you are looking to put your property on the market, this is the situation you want thus the term “Sellers market”.
I believe this is where we are currently sitting as with all the government stipulations and lending criteria changes have affected the market in a effort to slow down the rapid appreciation. Houses generally have longer days on market and can prices can be negotiated and more conditions in favor for the buyer can be put in an offer. If you have capital and good lending criteria, value can be obtained in this phase of the cycle. Now is the time for purchasing that property you have been waiting for and can dictate your terms when negotiating to get the deal that is not available in the other phases of the cycle. If you have been contemplating whether it’s the right time or not, this is a good time to get off the fence!
While I don’t believe in timing the market, as in the long run I do believe real estate will always outperform most investments. Being wise to understand what the climate is when making decisions is not a bad thing and should be considered. A knowledgeable agent who knows the business from a macro perspective can provide key insights that in turn benefit you financially when making these kinds of decisions. The Infinity 8 team is always willing to provide advice when it comes to real estate decisions you are unsure of, just make an appointment and we would be glad to discuss any realty needs you have.