Real Estate Markets

There is a market to list and a market to buy.  Rarely, can one sell in one and buy in another.   The simple economics of supply and demand apply to real estate and in part define a SELLERS MARKET or a BUYERS MARKET.   Essentially, a seller's market is where there are more buyers than there are properties.  A buyer's market is where there are more properties than there are buyers.

But, remember that real estate is not an exact science.  There is an emotional factor to be considered especially when it comes to purchasing real estate that will be called 'HOME', your primary residence. Purchasing or selling investment property is more of an objective process.  Investors are looking at design and appeal to a certain extent, but more importantly, location, numbers and upside potential are going to drive the final decision to purchase.    

There are other factors that can influence markets ranging from interest rates to government tax credits or incentives.  There are 1st time buyer incentives (2009 gave the $8,000 tax credit for 1st time buyers)  and senior, over age 55, incentives (carry your property tax basis from your old home to your new home [known as Prop 60 in California]) that can influence the decision to buy or sell.   Of course, one of best tax shelters for homeowners is the $250,000 capital gains tax exemption for a single individual and $500,000 for the married couple.  The current high rate of foreclosures has discounted pricing in some residential markets enticing investors to buy, rent and hold.  A twenty percent (20%) downpayment is yielding a good return that investors have not experienced in a long time. Couple that with tax shelters (mortgage interest and depreciation) makes real estate an excellent investment and hedge against inflation. 

Suffice it to say, there is a lot to know about real estate.  That is where a seasoned, knowledgable real estate agent becomes invaluble.  Whether it's buying a first home or a 10 unit apartment  building, the same general rule applies;  Purchase with the intent to buy and hold.  Secondly, never sell; rather trade, exchange or refinance and purchase more.  Time will take care of the rest.