The housing market can be incredibly fickle. It isn’t uncommon for real estate prices to fluctuate dramatically in an area. Similarly, if a neighborhood is up-and-coming, prices can seemingly skyrocket overnight once the area gains traction and catches the interest of buyers. In contrast, a single bad event can cause prices to tumble, at times, only for the short-term. By learning to monitor trends, you might have a chance to buy the right house at the best time, allowing you to earn some great money fast. If that piques your interest, here’s what you need to know.
Get to Know the Target Neighborhoods
When you want to make money quick in real estate, it pays to know your target neighborhoods. Monitor home sales to learn about comps in the area, including what property characteristics are considered valuable. For example, how many bedrooms and bathrooms do buyers look for when choosing properties? Are there any features that are deemed necessities, like sizable yards, garages, or gourmet kitchens?
As you research, you also want to look beyond the properties themselves. Stay on top of area news that discusses incoming or outgoing businesses, development projects, school improvements, or anything else that could impact the desirability of a location.
The goal is to find an area that may have been declining but is poised for a positive surge. Since buying low and selling high is the goal, spotting indications that a neighborhood is about to be on the rise could indicate that there are opportunities to be had.
Pay Attention to National-Level Influencers
As you conduct your research, don’t get caught up in the minutia of the immediate area. Certain national-level influencers – like rate changes by the Federal Reserve – impact housing markets as a whole. When interest rates rise, or lenders get more restrictive with their qualification, the buyer pool can shrink. Alternatively, when interest rates fall of lenders are more flexible about eligibility, buyer pools can expand.
If there are fewer buyers (creating a buyer’s market), sellers may have to lower prices to find someone to purchase their home. This can be beneficial when you want to pick up a property.
On the other end, when there are more buyers than sellers (a seller’s market), buyers have to compete more for homes. This can drive prices up based solely on the higher level of demand and decreased supply, making it a great time to be a seller.
Be Patient as You Try to Time the Market
Timing the housing market is tricky. You want to try and make a purchase when the market is nearly bottomed out, allowing you to score a deal. Then, you need the market to start moving upward again before selling makes sense.
Patience is critical, as it may take time for the markets to shift in your favor. But, once they do, you could make some significant profits surprisingly quickly.
Were you able to buy the right house at the right time, allowing you to make money quick? Tell us about your experience in the comments below.