Is Now the Right Time to Buy or Sell?

Are you trying to decide if it's a good time to buy or sell your home? Confused by the ups and downs of the real estate market? Don’t worry. Dealing with timing is an issue many people deal with. Thankfully, we have the solution. Knowing about the real estate market cycle can clear up the confusion and help you make better decisions. Whether you're a first-time homebuyer or looking to sell, understanding these cycles can make all the difference.

The real estate market cycle consists of four cycles. The four cycles are recovery, expansion, hyper supply, and recession. It may sound complicated, but don’t worry. We’ve made it simple and easy to understand.

Recovery

Recovery is the beginning of a market cycle. It takes place at the end of an economic downturn. Home prices are low, and many houses are empty. Slowly but surely, the economy - and therefore the real estate market - starts to get better, which means that home prices are slowly going up. For buyers, this is like finding a great deal at a sale before prices go up. On the other hand, sellers might see fewer people interested, but it’s still a great time to get ahead of future price increases.

Expansion

The market is getting better! New homes are getting built, more people want to buy homes, and prices are going up. Sellers can rake in a lot more cash for their homes because of higher prices and lots of interested buyers. Buyers need to move quickly because homes sell fast and prices are rising.

Hyper Supply

Hyper supply happens when there are too many homes for sale and not enough buyers. This happens when actors in the market get a little too excited. Think of a fancy new HOA or master-plan that has been built in your area, but nobody’s moving in. In this market phase, homes may take longer to sell and prices may drop. Buyers can find lots of choices and potentially good deals. For buyers, that may sound like great news, but they should be careful: the value of your home might keep falling after you buy. Sellers might need to lower their prices or make their homes more appealing to attract buyers.

Recession

Nobody likes this one, and for good reason, too. Recessions are tough on everybody. Economic troubles and higher unemployment make things tough to buy. Fewer people are looking for a home, and home prices continue to drop. Buyers might find fantastic deals, but getting a mortgage can be harder. Sellers may face challenges selling their homes and may be forced between selling at a lower price or waiting until the market improves.

If that seems like a lot of information, trust me - it is. Knowing about real estate market cycles is exhausting, and for many people it’s information they’ll use only a handful of times in their lives. If you’d like to know more about where we are in the real estate market cycle, and whether  now is the best time for you to buy or sell, please reach out.

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