Real Estate Kingdom

As we enter into the slowest time of the year for real estate sales it is important to keep a closer eye on the market. This is why we are providing this vital report that gives consumers an in-depth look at the real estate market. There are several different ways this information can be utilized. For buyers, declining home prices may be an indication to wait until the market bottoms out before purchasing. The flip side of that philosophy is that the only way to know when the market has hit rock bottom is when it starts to come back up. Hence, you run the risk of missing out on great deals by trying to perfectly time the market. My advice, buy today with the intent to hold. Many investors forget that real estate is a long term investment due to the unprecedented property value appreciation that was the theme of the early twenty first century. Now it is time to get back to basics.

As a seller, attempting to sell in a declining market this time of year is a daunting task. Plain and simple, it can be down right demoralizing. But even in the midst of these tough circumstances, there are options. The first and most obvious option, don't sell. If you can afford to make your mortgage payments it is probably best to hold until the Spring. The longer a property is listed on MLS the less the "perceived" value. I use the word perceived because nothing about your home changes to decrease the value but when a home lingers on the market buyers see it as additional leverage for negotiating a better price. In the winter there are less buyers looking to purchase real estate and as a result homes tend to sit longer on the market. So hold through the winter and list in the spring.

This strategy will typically get you the optimal sales price for your home. It all goes back to supply and demand. Although the amount of homes on the market greatly increases, so does the amount of buyers, thus increased sales volume drives home prices up. If you absolutely must sell in a declining market and in the winter, the most effective strategy is to reduce the sales price. So how do you go about a price reduction? The first step is to talk to a real estate professional that understands the local market. Ask them to provide a CMA (Comparative Market Analysis) to determine the market value as well as a month to month market trend report. If the market is declining at a month to month rate of 2% you would want to get ahead of the trend and reduce your price by at least 3% - 4%. This enables you to price your home at a competitive price and attract more of the buyers that are currently in the market for real estate.

For Example:

Boston Single Family Home Sales Data:
Single Home Sales:
December 07: Single Family Median Home Values: $332,500 Volume: 60 Homes Sold

This represents a -4.3% Decline in value from November 07 and a -9.6% Decline from December 2006. Volume is also down -25% and -38% respectively.