At REMarketStats when we talk about real estate timing we talk about using market indicators to analyze real estate markets and calculate a market's momentum. What exactly are these market indicators we are talking about?
Market indicators are key data elements that allow us to gauge the health of a real estate market. We look at population growth, existing home sales, new home building permits, average or median price, unemployment and employment, the average price of new construction and also, when available, time on market or month's supply. We take all of these indicators together to gauge the health of a real estate market.
I'm going to run a series of blog posts talking about each of these different indicators and how they affect real estate markets and real estate timing. This is critical for real estate investing, it allows you to know When to Buy and When to Sell.
Today let's take a look at Population Growth. Population Growth gives us a great overall long term outlook for a market. If an area is seeing continuous population growth this will lead to a demand for housing over the long term. Areas with flat population growth or that are in population decline are less likely to see large increases in the value of real estate. Population is not a short term indicator, an area may still see shifts in the housing market even if the population is swelling. For example, if an area gets overbuilt too quickly to meet future demand, it may take time for the population growth to catch up, resulting in a temporary buyers market.
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