A real estate agent in my area has been running a TV commercial telling prospective buyers that just because other parts of the country are having housing market problems not to worry about. “You wouldn’t want a weather report for the whole country,” this agent announces, “So why do you listen to national real estate news?”
Despite my belief that now probably isn’t the best time to be buying in our real estate market, the man does have a point. The housing market in New York City has some major differences from the housing market in Albuquerque. Not all housing markets are struggling, and not all housing markets are going to have the same rate of recovery.
How do you know when your housing market will recover?
Being able to time a home purchase is crucial — you want to get the best deal, but you also want to make sure that your situation will be comfortable after you buy the house. The same is even more true if you’re trying to sell a house. It may be difficult to sell your house at what you consider a reasonable price right away. If you know a little more about your local housing market, you can decide whether it’s worthwhile to wait to sell your house.
While there is plenty of data that you can use to try to decide on what your local housing market is going to do next, there is one statistic that makes it simple: the number of for-sale homes. This number is usually measured in months — the number of months it would take to sell all the homes on the market at the current sales rate. As a rule, a larger number — more than a few months — means that the housing market in your area is weaker. Usually, it means that sales are slow. It can also mean that a large number of houses are going on sale, but that occurs less often.
If you want to do a back of the napkin calculation to determine if your area is starting to recover, just compare the last several months’ numbers. You can get those numbers from your local realtors’ association. Try searching Realtor.org if you aren’t sure where to start.
Looking over the numbers and checking for an upward trend isn’t a great statistical analysis, admittedly. If you have the time, taking a close look at some of the other numbers you can get from your local realtors’ associations, as well as the more professional statistics. The purchase or sale of a house is a big deal — you want to have as much information as possible. The number of for-sales homes is really only a starting point — a general idea of whether it’s time to start doing that more in-depth research or if you will want to wait a few more months before moving forward on your real estate plans.
