Signs your home will increase in value
Recent reports on the health of the economy and the housing market have shown improved conditions. The federal tax credit for first-time buyers, the newly implemented tax credit for current home owners, affordable home prices, and low interest rates also are driving many buyers into the market. However, housing markets are local, and can vary greatly from one to the next.
Still, there are indicators on which you can rely to determine whether your home’s value will rise.
KEEP THIS IN MIND:
• The unemployment rate in an area can help you determine if your home’s value is likely to rise. As the unemployment rate rises, fewer individuals are able to purchase homes, decreasing the demand, and driving down prices. To find your city’s unemployment rate and whether it’s rising or falling, you can visit the Bureau of Labor Statistics’ Web site at;
• On average, foreclosed homes sell for 30 percent less than similar homes in the same area, however, that figure varies by housing market, according to an executive at RealtyTrac.com, which tracks foreclosures. As foreclosures increase, the average price of homes in the neighborhood decreases. To view properties in various stages of foreclosure, including foreclosure filings, auctions, and bank repossessions, visit:
• Your neighborhood’s supply of homes for sale is also a good indicator. A supply of five to six months is considered “normal.” For the most extensive inventory level comparisons, you should contact a Realtor who specializes in your local neighborhood to provide a detailed analysis
• Following the list-to-sale-price ratios of your neighborhood can help determine the direction of home prices. If the price difference is shrinking, that suggests the real estate market is improving. Some real estate Web sites offer this information, or, once again, you can contact a local Realtor who can provide the average list-to-sales price ratio and a historical comparison for your neighborhood.
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