Understanding Home Buying Trends

Happy New Year! Last week I talked about 5 things you can do to prepare yourself to achieve your goal of home ownership in 2018. As we continue to prepare for the most popular home buying season, spring, I think it’s important to familiarize yourself with the market and the trends your area has been seeing. First, understanding the trends in the overall market industry is important. Without being too technical, the housing market has continued to rise over the last two years. After seeing a significant dip during the housing bubble burst we’ve seen the market continue to come back and grow year after year. This means that as you look at the sale prices of homes that sold two plus years ago you may think to yourself “Really, they’re selling this house same house now for $10,000 more than they bought it for and they haven’t even updated it? C’mon.” Yep, that’s a good possibility. A few years ago it was more of a buyer’s market; homes were selling for less and people were getting great deals. In the last few years we’ve seen a shift back over to a seller’s market. That means there are a few more buyers than there are sellers so houses can demand a higher purchase price. Think back to your basic ECON 101 class from college: Low Supply + High Demand = Ability to Charge More. Second, it’s important to familiarize yourself with the trends of your state, your city, and the neighborhood you’re looking to buy in. If you’re from Richmond you know that south of the river versus the West End versus Church Hill are all extremely different areas of town and the houses in those market follow suite. In the spring last year I saw houses in Church Hill fly off the market within hours with 10+ bids and $20,000 above list price while houses on the south side lasted a few more days (ya know, like one or two) and sold within a few thousand dollars of asking. Your agent should be able to explain the difference in the markets and the areas of town. If you want to further your own knowledge you can also look at market reports provided by the Virginia Association of Realtors. If you aren’t from Virginia you can probably find a similar market analysis from your state or city’s realty association.Lastly, it’s important that you know how the features of the home you’re considering affect the price. For example, if you’re crushing on a home that has a garage in a neighborhood or area of town where garages are scarce you should expect that home to be more than other homes in that hood. What else can affect the cost of your home?

Updated bathrooms

Updated kitchen

Landscaping + decks

Paved driveways

Fences

Garages

Lot size/acres

Knowing these trends can help you feel confident when you go to make an offer on your new home this spring. Be sure to have these discussions with your Realtor® as you start your home buying journey! 

Happy Hunting,