Oftentimes, the Louisville real estate market can seem like a roller coaster ride—up and down hills, tight turns on the verge of losing control, both exciting and frightening, coupled with uncertainty about what is right around the next turn. At least it seems that way at times...
In reality, our market has endured challenges that were brought upon it by a variety of factors, many of which originated outside of our city. Financial regulations, mortgage lending rules, appraisal requirements, plus all of the broad economic factors affecting the job market put external pressures on our real estate market.
The good news is that we have just completed a relatively "normal" year in real estate, with many positive signs, and by many estimates are proceeding into another year promising to be filled with better news. While not the other side of the coin, we still face real challenges in our market that will require time, regulatory change and fresh ideas to overcome. Home buyers and home sellers in the Greater Louisville Area need to be aware of the current state of our real estate market and be ready to adjust as necessary.
Instead of a statistical analysis of the market, which you can find elsewhere if you are interested, I want to focus on a practical analysis of our market and give you suggestions on how to approach it in 2013.
First and foremost, for both home buyers and sellers, you have to gain access to accurate and current real estate market sales and inventory data. Oftentimes, a local real estate agent can help you with this information and there will be other benefits to establishing a relationship with a great agent.
This market data is going to become part of the foundation of your decision-making process. Everyone's personal needs are different, but the market data remains objective and it is critical to how you interact with the market. Keep in mind that Louisville remains a hyper-local real estate market. This means that the market can vary from street to street, even in the same neighborhood, so you need to make certain that your market data is correct for the area in which you are working.
From an analysis of this market data, you are going to be able to make adjustments to your plans, your negotiating strategies, your expectations and earn yourself a footing from which to participate in the market.
Presently, we are in both a buyer's market and a seller's market, depending on the specific area in which you are located. The combination of tighter lending rules, lower mortgage interest rates, a high general inventory of homes and a low inventory of desirable homes in good locations has placed additional unusual pressures on our market. It takes a keen analysis of the current market data to know the market in your area and to make the necessary adjustments to best protect yourself when buying or selling a home.
From a home buyer's perspective, you should work to answer at least the following questions from the market data. What are the area pricing trends? What is the average days on the market for similar homes in the area? What is the absorption rate for the area?
Pay particular attention to the analysis of this information because the market in the area that interests you may differ dramatically from what is reported in the media or what your friends and family discuss. This past year, many home buyers in the Louisville area were very surprised to find homes selling within days of listing near full price. In addition, they were surprised and unprepared to find themselves in multiple offer situations.
By studying the current market data, you can make the necessary adjustments to be prepared to act fast, negotiate decisively when facing a potential multiple offer situation and to set reasonable expectations for the market. This helps to minimize emotional reactions to tough decisions and helps you prepare a successful strategy to secure the home that you desire.
From a home seller's perspective, the necessity of the same current market data and questions to be answered by home buyers also apply to you. In addition, you have to remember that you are going to be offering a major commodity for sale and all of the tradition market forces will be in play and should be understood. Accurate real estate market data will give your decision-making process a footing from which to adjust to your specific needs.
Because of the importance of standing out against your competition, taking the time prepare your home for the market takes on an even greater importance in our current market. You really do only get one chance to make a first impression, and you can greatly improve your chances of a quick sale at a good price by making certain that buyers are amazed by your home before they even set a foot within its walls. This means staging your home, taking care of basic maintenance, making necessary and tasteful updates, plus ensuring that your home is photographed incredibly well to stand out online.
Both home buyers and home sellers will benefit from taking a little time to think through possible negotiating strategies based upon their market research. The time to do this is early in the process of buying or selling a home so that you have a basic plan from which to work. Because the market is continuing to grow and improve in many ways, buyers and sellers both will possibly need to act fast and be proactive in negotiations as opposed to lagging behind the market and becoming frustrated.
Home buyers need to be cautious and thoughtful in this market as changes may happen rapidly this year and there remains future risk in the market. Home sellers, especially sellers with exceptional or desirable homes to sell, should give consideration to becoming active in this market. There is an opportunity to take advantage of the improvements in the market and sell your home for reasonable terms.
About the Author: Joe Hayden is the Team Owner and Manager of the Joe Hayden Real Estate Team—Your Louisville Real Estate Experts!
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