5 Indicators That Your Local Real Estate Market Is Heating Up (Or Cooling Down)

16 May, 2019

Whether you are interested in selling a property, or want to get the most out of a new real estate acquisition, it is important to have a pulse on the local real estate market. In fact, properly gauging the health of the local real estate market can help you to not only determine the best course of action, but it can also help to stretch your dollar even farther. From up-and-coming areas, to established locations, the following indicators can help you decide if the time is right to buy or sell.

The most successful real estate investors stay up-to-date on current trends. Whether you are new to real estate investments, or are a seasoned homeowner, these five signs can help you determine whether a local real estate market is about to heat up or cool down:

  • Days on the Market and New Builds—Inventory levels provide strong insights into the health of the real estate market. Be sure to examine the number of days on the market, if contractors are focusing on new builds in the area, and if the year-over-year price appreciation is on the rise. If the number of days on market is decreasing, while the number of new builds and home appreciation values increase, then all signs point to a strong (and growing) real estate market.
  • Showing Requests—One factor that many sellers and buyers overlook is the number of showing requests. If the number of showing requests increases, then it is a good indicator that the local market is on the rise. In this vein, if you want to better predict future market trends, then it is important you analyze the number of showing requests for all property types.
  • Pricing History and Absorption—One of the signs that your local real estate market might be changing is its history, specifically its pricing history. Pricing history, available inventory, and absorption are all indicators that a market could be on the rise. With the help of a trusted team, you will be able to recognize when the latter signs are actually pointing to a potential housing bubble versus a strong market.
  • Closing Vs. List Prices—The variance between closing versus listing prices is a great indicator of the local real estate market. In a booming real estate market, the closing price will be close to (and sometimes higher than) the listing price. However, in a cooling market, the closing price can often be 20 percent less than the listing price.
  • Interest Rate Stabilization—As a general rule of thumb, when interest rates rise and fall local real estate markets tend to be more tumultuous. However, when interest rates stabilize, then the markets can see a return to purchase activities. For example, when interest rates spiked in 2018, many buyers exited the market in favor of keeping their current mortgages, rather than risking a higher rate on a new purchase loan. However, as interest rates have stabilized in 2019, buyers have returned to the market.

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The above five indicators can help you to effectively determine if a local real estate market is heating up or cooling down. However, if you want to truly maximize your investment opportunities, you should partner with a trusted title agency that can streamline your needs and get your clients to the table faster than ever. To learn more about or leading title technology and services, and how it can wow your clients, contact Velocity Title today.

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Velocity Title supports the real estate industry with a comprehensive line of title services including purchases, refinances, commercial, title insurance, attorney consulting, 1031 exchange, and short sales. With a focus on the best CUSTOMER EXPERIENCE, Velocity Title incorporates leading title TECHNOLOGY and EXPERTISE into every transaction—enabling the final step in the home buying process to be EASY, EFFICIENT and INFORMATIVE. To learn more, contact us today!


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