How to Understand Market Statistics and Indicators in Real Estate Investment?
The real estate investment looks easy and simple with buying the properties, improving them and sell them or give for rent. However, it is often so risky that it can ruin your business and result in a total loss of your investment. Therefore, real estate market statistics and indicators especially the statistics about new home constructions are essential and important factors for future investments. Take a look at the market statistics and indicators from the year 2000 to 2019 and you will find that each of the statistics and indicators telling different stories about the homebuilding industry. Get in touch with expert real estate brokerage agencies like BéatriceBaudinet who will help you understand the market statistics and indicators as well as provide you with all necessary assistance in real estate investment.
The real estate market is often complex and difficult to understand. For example, in a given market situation the home starts are steady, but housing starts declining. It will eventually toll on home sales. In this context, most buyers will not be interested to wait for longer than a year at the maximum. It also further indicates that there is a shortage in the supply of concrete or lumber or construction workers and these shortages ultimately drive up costs as well as sales prices resulting in decreased demand for new homes.
In other cases, if there is a steady decline in mortgages the builders will have an inventory of pending or unsold houses for sale. In this context, you can also foresee that the demand is high, but homeowners do not get mortgages. The rising home startsmay look like an indicator of housing strength but actually, they may be also a bad sign. Similarly, the declining home closing may be an indicator of a weak housing market.
The sale of new home starts as the first step of the entire process of investment which would take a stipulated period of nine to twelve months. If there is a good pick up in the new home sales, you can be sure of the indicator that the closing will rise within a year. When the buyer signs the necessary paperwork and provides a deposit to the homebuilder a new home sale come into existence. The local housing regulators give the permit two months after the paperwork is signed. However, this permit is an early indicator which may not be always accurate particularly in the cases of bankruptcy of the builders when the builder may never build the permitted unit.