There are many conflicting accounts of the overall national trends in the real estate market today, with some reports saying that the decline in property prices have bottomed out and others saying the exact opposite. However, national trends are virtually meaningless to the independent home buyer as these trends may or may not be applicable to the local market.
In some markets home prices are still declining; in others the prices have stabilized; and in others under-pricing has already led to speculators moving in and driving up the values. The circumstances in your local market may or may not reflect national trends, so little weight should be given to these general reports. Careful local research by a potential home buyer can help avoid making serious mistakes.
If the potential home buyer is using a real estate agent, the agent is likely to provide an accurate assessment of the situation. However, a real estate agent has a vested interest in making a sale, so the information they provide might be overly optimistic. While the advice of an agent is a good place to start, their advice should not be considered exclusively.
There are websites, like Trulia (www.trulia.com) that can make doing your own research easy, and give powerful unbiased information about the market being considered. Current sale prices and price histories for certain market areas will be available on sites like this. If a particular site does not contain information about a particular market, searching for a local equivalent site could provide the necessary information. If there are no research opportunities online then remember there are public records available that will also give insight into recent housing prices in the area.
Since the bursting of the real estate bubble in 2007, it is vital for the potential home buyer to find out where in the cycle the local market is. If the number of available homes is declining and the prices are increasing, it is a good indication that the local market has reached the bottom of the cycle, so it may be a good time to buy. However, this is not always the case. If current buyers are acquiring multiple properties, it likely means that these are speculators and they may or may not be creating a local price bubble. Looking through the local news, talking to local agents, and going through the local public records can help the potential buyer identify and avoid speculative bubbles.
Regardless of what national or regional trends say, when it comes to real estate these trends are virtually meaningless. Careful research of the local conditions and markets is vital to making a wise investment.