These 4 Critical Housing Trends Dictate The Future Of The Real Estate Market

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Real Estate Agent with Joe Manausa Real Estate 8508880888

So many different news agencies report how the real estate market is doing, yet few offer usable information that can help us determine the real direction of the market. Inventory flow tells us whether the market is picking up speed or if it is slowing down, and these four key housing trends will give you a market awareness to help guide you in your real estate investment decisions.

Four Critical Housing Trends

The easiest way to track the real estate market is to watch four critical housing trends. This simple tracking, over time, will give you all the insight you need to know whether prices will be rising or falling, and whether now is the time to buy or sell.

  1. New Homes Listed - Simply measure the number of homes that are coming onto the market. This includes new home listings as well as homes that are re-listed after they “fail to sell” under a previous listing contract.
  2. Failed To Sell - When a home listing leaves the market without actually being purchased by a Buyer, we refer to these listings as a “fail to sell.” Whether the home runs through the entire course of the listing agreement without being sold “expired,” or if the seller changed her mind “cancelled,” tracking failures is a very important part of the housing trend analysis.
  3. New Pending Sales - Homes that have recently come “under contract” do not actually affect the current inventory of homes, as they have not left the market, nor have they added to the number of homes on the market. However, they are still critical because over time the number of homes that are sold is always going to be a subset of the number of homes that have previously come under contract. The “pended” trend allows us to roughly predict the future sales trend.
  4. Sales - The number of homes that successfully sell each period is the one stat that everybody seems to report. While this is the most important of the four key housing trends to track, it can be greatly enhanced by following the three other trends previously measured.

Tallahassee Housing Trends

We can observe the four key housing trends in a real world example from the Tallahassee real estate market.

Tallahassee Housing Trends Graph

With new home listings falling and failures on the rise, we are seeing inventory reducing for the first time in years. Additionally new contracts and sales have leveled off and are actually starting to recede (normal seasonality), so I am concerned that inventory reduction might slow for the next six months or so. By keeping a close eye on these trends, we will know what is happening in the Tallahassee housing market.


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Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.
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Rainmaker
170,297
Richard Stabile
REMAX real estate associates - Woodcliff Lake, NJ
Bergen County New Homes Builder Realtor

Good points, also try using rate of change period against period.

Richard

September 17, 2008 10:16 PM #1
Rainmaker
768,130
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Thanks Richard.

September 18, 2008 04:48 AM #2
Rainmaker
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Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Hi Joe - Excelllent insight into what moves the Real Estate market. In your next post it would be helpful if you could explain how to make it all get better quickly:)

September 18, 2008 07:20 AM #3
Rainmaker
768,130
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Thanks Bill. Close your eyes, count to 543,234,687,432 and everything will be fine!

September 18, 2008 12:31 PM #4
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Rainmaker
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Joe Manausa

Tallahassee Real Estate
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