Real Estate Market Conditions

Author: Tony Rose

As a sixteen-year real estate professional, I´m often asked; "How´s themarket?" Although somewhat of a vague question, I do understand what they´regetting at. Your perception of the condition of the market is based primarily onyour role in the market. I´ll get more into that in a minute.

Yes, there are hard facts that are just that, facts. Total number of sales,total number of properties on the market, average days on the market and averagesales price are the primary ones. But what do all these statistics mean to you?It depends on what you want to do.

I´ll use my local market, Colorado Springs for the examples, however, theseprinciples apply to whichever market you´re in. Over period of about twelveyears, with a couple of temporary slow-downs, our market has seen consistent andsteady price appreciation, typically 8-12% annually. At the same time we´ve beenbuilding 4,000-5,000 new homes per year and selling an additional 4,000-5,000re-sales for a total of 8,000-10,000 total home sales.

The past year and a half, things have changed. Our total sales number hasdropped off approximately 20% and the total number of homes on the market hasincreased by about 20%. Sounds terrible doesn´t it? But, at the same time homeprices have continued to increase at a 3-5% rate. Now that doesn´t seem to be asky is falling figure now does it?

We´re still selling approximately 7-8000 homes a year for a community ofabout 500,000. Not bad. Actually, it´s pretty good. The problem comes down toperception. A great deal of the players in the real estate market came in duringthat 12-year boom period. They thought THAT market was normal. No. it´s whatwe´re seeing now that´s normal.

So what does this mean? As a buyer, you´re going to get a reasonable price onyou home. You´re also going to have more choices of homes because of the excessinventory. However, a great deal of excess inventory is OVERPRICED. So, as abuyer, you´ll most likely pass on a number of homes or not even look at thembecause their starting point is too far off from yours.

And, as a seller, this is the prime problem and the main reason why so manyhomes stay on the market for so long; they´re simply overpriced for the currentmarket conditions. If you price a property right, it will sell and sell quickly.It will usually sell within a couple of months, not the 8 months to a year thatsome are seeing. So, if you want to sell, price it right and make any necessaryadjustments quickly.

There´s another component that has affected perception that I haven´t talkedabout yet and will in another post. That´s fix-n-flip. Everyone´s seeing it onTV or has been to the seminars and now they think they can do it. It´s had areally bad effect on the market. As I said, I´ll get more into that on a futurepost.

To learn more about real estate please visit my web site: http://roseusa.com

Tony Rose, MBA, is the owner/founder of http://www.iswami.com, the user-driven web sitethat links to the most recommended locally owned and operated businessesthroughout the US. Tony has been a successful business owner in the fields ofReal Estate, Development and Web Development for over twenty years.