‘It’s never been harder to buy or sell a property.” This is a sentiment that’s shared by many of my colleagues that have been in the real estate business for many years and through many market cycles. Fact is that they’re right. And historically speaking, here’s one reason why: From 1900 to 2000 home prices appreciated roughly 3-5% year over year. Yet from 2000 to 2006 the cumulative appreciation was 89%! We reached such ridiculous heights, that the fall had to be painful. And that pain continues to manifest itself in the way of foreclosures, bankruptcies, and the havoc that those wreak on everyday Americans. Make no mistake about it, we’re right in the thick of a social and financial reality check in our country; a painful one at that.
However, even pain can be mitigated. And in the case of real estate, that mitigation comes in the form of information. As a home seller, it’s not nearly enough to know what homes sold for last month, last week, or even yesterday. Where the market was this morning is of no consequence to you. Where it will be tomorrow and how you position yourself within the context of that future will ultimately determine your success or failure. And if a real estate professional cannot demonstrate that he or she has their finger on the pulse of that future, than I suggest that you find yourself another doctor.
“But what if I’m buying”, you may ask. Truth is that the methodology is not much different. Learning about recent sales is an indicator of past market activity, where the market was, and subsequently of limited value. Yet to determine whether a property is a good buy, or whether to buy at all, you need to know where the market will be in the foreseeable future. And once again, if your real estate professional lacks the resources to do that, then you certainly need a second opinion…or maybe a specialist! LOL!
