The state of the economy, interest rates and market cycle all play a role in the final price of your dream home, but it’s not always easy to tell whether now is a good time to become a homeowner. First time homebuyers are typically nervous about entering the homebuying market because they simply can’t tell the difference between a buyer’s market or a seller’s market.
In a buyer’s market, housing prices are very attractive and interest rates may be lower than the average. You may even see more ‘For Sale’ signs in different neighborhoods and sellers may be willing to reduce their prices drastically just to sell the home.
In a seller’s market, people might state that the home and property industry is in crisis. It would be hard to spot affordable deals and some sellers might organize exclusive lotteries wherein select buyers bid on exclusive homes.
If you’re a first time homebuyer, catching the right market cycle can make a significant difference in the final price you pay and the value your receive from your purchase. Barron’s ‘Smart Consumer’s Guide to Home Buying’ explains that “cycle phases are much easier to pinpoint long after the fact.” However, “if you know what to look for, it’s easier to figure out the state of the market.” Consider these additional key indicators to make the best possible decision when considering buying a home:
In a buyer’s market, you can expect to see: many ‘For Sale’ signs around the neighborhood; many auctions of repossessed homes and drastic discounts on formerly high-priced homes and estates; sellers offering concessions and incentives to attract strong buyers; a rapidly rising number of foreclosures; many price reductions and lower-than-average prices for high quality homes.
In a seller’s market, you can expect to see: very few ‘For Sale’ signs around the neighborhood; relatively high prices and competitive selling tactics within the same neighborhood; people ‘flipping’ homes where they buy a home and renovate it to sell it in a very short period of time; news stories that point out how unaffordable it is to buy a home; lots of rental complexes being converted into condominiums.
The best time to buy a home is during the buyer’s market when sellers are more eager to sell their properties and give out discounts. A good indicator to buy a home is when ads of homes with price cuts, discounts and other extra incentives start to circulate. You might be tempted to buy the first home you see or the lowest priced home but it is still important to work with a professional agent. Get a professional agent, especially if this is your first home purchase, to guide you in choosing the best home that would fit your needs.
As with anything, you need to educate yourself about the home buying process for you to make an informed decision. Look for market indicators and work with an expert realtor to time your purchase and get the most out of your budget.
When looking for MN homes for sale, searching the internet is one of the easiest ways to find the types of real estate your looking for. People use the Minnesota MLS to view most of the homes that are currently on the market.
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