In nearly every area of finance there are people try to move forward, with a better advantage, trying to predict the exact aspect, in order to purchase at a low cost, and sell high! It is common to see this type of behavior in real estate transactions, both buying and selling, specifically residential transactions! If prices appear to be rising, particularly in the last few days and we’ve witnessed an unprecedented pace of price rises and more people seem to be taking part with what is known as flipping properties that is, purchasing an individual house at an apparent, opportunity-based cost, making a few, mostly cosmetic adjustments, and then selling it soon with profits! In the last 15 years of being an experienced Real Estate Salesperson licensed within New York, the State of New York, I have seen this process having been successful and, substantially less! With that in mind, the following article will attempt to briefly review, think about the issue, go over, and then discuss the four main reasons why people should not attempt to market the time and real property.
- It’s impossible to forecast the future consistently and/or, accurately! If we were to possess the ability to see a Crystal Ball, perhaps, we’d be more competent in accurately, and consistently, forecasting the future, which includes, in relation to home prices! Because in the past, prices tend to be fluctuating, it can be difficult to discern when this could be a good idea! Naturally, any financial plan or action should be evaluated on a risk/reward basis. Only those who are to be willing and ready to manage the risks stress, risks, and loss, should try to sell a house!
- A variety of (not just one) elements affect the market for real estate, including the price. No single factor can determine the price, nor how they will change! A few of the variables include prices of interest (including the mortgage rate and term, etc.) Supply and Demand the perceptions of buyers and sellers as well as confidence! We’ve experienced long-term, record-setting low rates of interest, and in turn mortgage terms! If this happens, more people can qualify for mortgages, thereby growing the demand. The most important factor is the relationship between supply and demand and when the supply is less then the demands, the prices will go up! A key factor is emotions, which in turn affects the opinions of both purchasers and sellers! The overall confidence of consumers affects people’s attitudes, and this affects the market overall!
- Different elements don’t always work together! If mortgages are simple and less expensive to obtain the cost will usually rise! If confidence is high and inventory is low, it generally creates an increase in prices! However, these factors, that tend to raise or reduce house prices are not in sync with each other, so the overall trend is more difficult to predict!
- Relationship between sellers of homes and potential home buyers who are qualified. buyer: In the general case, when the market is booming it means that there are more qualified, prospective buyers than homes – for sale (inventory)! The reverse set of circumstances, typically is a buyers Market. Sometimes, we can witness the opposite of these conditions!
For the majority of people, trying to sell time or real estate is risky and speculative! Likeany other financial asset, it is best to proceed with an open-minded mind and in a carefully considered way!