If you are waiting for prices to bottom out AND you also want to take advantage of the lower mortgage interest rates, then my advice to you would be to choose a real estate agent and work very closely with him on this matter.
The reason for this is that some of the information you require to make an assessment on this delicate balance is much more easily accessed by an agent than by you.
In order to notice a difference in conditions in the real estate market place, you will need to have a pre-existing condition to compare it to. So choose a realty agent and write down the answers to the points below. You can then use these figures as a base for comparison as the statistics change.
When choosing a real estate agent, choose an agent who is Internet literate, i.e. one with a good web site, as the type of information you will be looking for is easily accessed on the Internet.
There are five easy to find pointers which may indicate a tightening up of the market. These are the facts you will need to establish now, and then you will need to keep monitoring them for a difference in market conditions.
If you are looking to buy in your own neighborhood, you will often notice approximately how long it takes for a listing to get that 'SOLD' sign slapped across it. This amount of time is one of the pointers that can indicate market change.
'Days on market' (DOM) is the time period which starts when a listing real estate agent adds the home to the MLS listings. The DOM period ends on the day that the house is sold.
When DOM's start to reduce, it could signal a move towards a seller's market. There will be more buyers than homes for sale, selection goes down and homes move faster. Point 1: Look for the number of 'days on market' to start reducing.
When a home is sold, is will go for closer to the listing price as a seller's market looms closer. The more prospective buyers there are, the less inclined a seller will feel about dropping the list price of the home.
Currently most homes sell to within 97% of their listing price. This means that a three hundred thousand dollar home has typically been negotiated down to nine thousand below that asking price. Point 2: Look for homes to start selling closer to listing price.
If prices rise or at least remain firm, this means the market demand is up. Sellers only reduce their price if they need to attract buyers; if the market is optimistic or homes are in short supply, prices go up. Point 3: Look for an upward trend in prices.
The number of listed properties will decrease as more buyers snap up bargains. The best always leave the market first; this is why it is imperative to keep a keen eye on the realty situation. Point 4: Look for a drop in inventory in your location.
Mortgage applications will increase; in fact they have been increasing, but all other pointers also need to be in place. Low interest rates help house sales. Point 5: Look out for an increase in mortgage applications.
Your real estate agent can show you how to access this information, and consequently how to monitor it. You do not want the route to the knowledge to be accessed through the agent's personal web site, as you will want to check it daily. You need to know how to find it on your computer at home.
Once the agent knows you are looking for signs, chances are he/she will also inform you of any market changes.
When you do know that the time is right, and you see your dream house, you must act fast! You could be thwarted if you have not already put your pre-approved financing into place. Financial or mortgage pre-approval carries no fee and no obligation.
It is solely in your own interests to become pre-approved. If the markets do not tempt you to buy, the pre-approval is simply not used - you just walk away with no penalty.
