I am currently in a hold pattern, not looking to buy or sell investment property, but every quarter I dip into the real estate listings to see what is going on. Getting into this habit will educate you on what the current real estate market trends are. I do pay attention to the national statistics on real estate trends, (sales up or down, rental prices are on the rise and all that) but the bigger picture is what is occurring in your own back yard.
Window shopping the local real estate market over a period of years will give you knowledge that you can use when actively seeking to sell or buy investment properties. I constantly amaze realtors by drawing on current statistics and near past performances I observe, when discussing current listings and negotiating price. In a recent showing of a multi unit I commented to the realtor, ‘this property is priced way to high for the current market which is basically flat and comparable properties have sold for at least a third less than this one’. The realtors reaction was that of agreement and she will often pass this comment onto the party listing the unit.
Here are some benefits of following the property listing market no matter what your current status is:
- Price Awareness— You will know the basic price points for investment properties which can fluctuate from one area to another over time. Use this information in your decisions to buy, sell or hold.
- Knowing the Current Trends— Are property sales on the rise? Are the sales prices increasing or decreasing? what market areas are doing better than others? This can help shape any future decisions you make in buying that next investment property.
- Finding that Must Have Property— In browsing the listings you may stumble upon that property you thought would never become available (unless you built it yourself). Every now and then a property will hit the market that is being sold by an extremely motivated party, (estate sale or relocation situation) and a quick sale is more important than getting top dollar, so the buy low sell high instinct should kick in if you have been following the market for some time.
- Setting off a Sell Soon Alert— If it begins to be obvious that it has been a sellers market, prices have risen for a number of years in your area and your property could fetch a tidy profit; its time to put your property in order (complete those projects and begin tidying up) and list!
- Increasing the Buy Up Chances— If you have the assets to purchase an investment property but have been priced out of a desired area, a down market trend may begin to appear, in which case you can break into that market area.
These are a few noteworthy examples of why you should always keep an eye on the real estate market in your area. It does not take that much time and I enjoy the process of window shopping for real estate investments. More often than not the process gets me thinking of new opportunities that might otherwise have passed me by.