November 16, 2011
Home buyers should be aware of local market real estate trends, however they should find a local real estate agent to help them put market conditions into perspective. While it is true that a drop or rise in home prices in an area can affect the ability to purchase a home, the housing market is sufficiently complex that it cannot be timed.
For example, home buyers might delay a purchase too long in the hopes of a price drop, only to find the opposite occurs or that mortgage rates increased. Because of this possibility, home buyers are better off consulting with a real estate agent who has the expertise to understand such trends.
When shopping for a home, it is wise to keep this unpredictability in mind for the future as well. Local employment conditions, the condition of the property and other factors might suggest the future direction of the area's home prices, but there is no perfect way to estimate them.
Homeowners are affected in many other ways by their decisions, and should not overlook them or minimize their importance. For example, a young couple intending to have children will want to focus on the size of the home, number of bedrooms and arrangement of space as much as the price, if not more. A family which has purchased a home comfortable for one child might find themselves forced to cope with a lack of space for years after having a second.
How personal factors affect home selection
Obviously, personal predictions of the future are imperfect, as well as financial ones. However, home buyers have a much greater ability to estimate their own future choices than the changes in the housing market. Another example would be home buyers who know, at the time of purchase, that they do not intend to stay in the area for more than 5 or 10 years, compared to some who plan to remain indefinitely. The longer stay would likely justify a stricter selection process.
Personal factors can determine how important a home's location is. A homeowner who works at home might not need to be located anywhere specific, or one running his or her own business might find it particularly important to be able to get to work
quickly in an emergency.