Buying a home is one of the biggest investments you will ever make, but even more importantly, it is one of the most crucial decisions you will make for your entire family. School, work, friends and community are all dependent upon your choice of where to buy or build. Unfortunately, most people spend a great deal more time falling in love with the house than they do objectively evaluating the real estate market data. Sadly, that can result in costly mistakes.
Take time to investigate the following real estate market data points for your location in order to make the most informed decision possible when buying a home:
1 Is the population growing, stagnating or declining?
Whenever possible, search for areas that are growing, but balance growth with the total cost of ownership.
2 Is the local economy healthy?
Towns that depend upon one or two major employers are subject to experience drastic declines in the real estate market and their overall economy should an employer close up and leave town. Even if you don’t work with that employer, the resulting sales due to relocations or foreclosures may negatively impact your own real estate portfolio.
3 What is the ratio of rentals versus owner occupied?
Areas with very high rental rates can translate into higher insurance rates, lower resale values and potential difficulty in obtaining financing at later dates. This is a highly variable measure and should be discussed with a real estate professional with in-depth knowledge specific to the market and location in question. Visit homesandland.com to use the free agent search.
4 What is the foreclosure rate in the local community?
Sub-prime market problems have increased the visibility of the problem, but it is important to realize that it is not equally distributed. Some neighborhoods are indeed experiencing a great deal of difficulty due to foreclosures, whereas other areas are barely impacted. Obviously caution is advised to avoid areas that are negative impacted, but also don’t let perceived risk frighten you away from what may be a golden opportunity. Instead, investigate the actual numbers.
5 What type of economic development, infrastructure and other plans are under way in the area?
It is possible to ascertain a great deal about the future viability of a real estate investment by understanding the growth patterns taking place. For instance, some of the greatest appreciation in the nation over the past few years took place in areas barely recognized by most people. Few had heard of Ocala, Fla., but as an area with lower than average home prices and one of the largest growth rates in the nation, Ocala’s potential economic development and infrastructure indicated the potential for massive expansion. The result was double-digit real estate appreciation for five years in a row with a strong continuation even as the rest of the nation faced rough going.
Take time to research the real estate market data in your area before making a purchase in order to ensure your financial health and the security of your lifestyle.