If you have been paying attention, you most likely have noticed that the real estate market has ups and downs that tend to occur in cycles. You can use these trends to analyze the Newport News, VA housing market to decide when to buy or sell a home.
After a housing market crash, there is a period of recovery. During this time, construction companies take full advantage of all of the new buyers entering the market, developing properties at a breakneck pace. Because there is still a lot of demand for these homes, the prices for houses continues to rise.
Eventually, however, the supply of homes outpaces the demand. New houses that are being built may sit empty for a long period of time without finding buyers. At the same time, interest rates usually will go up, making it harder for developers to borrow money. Although this stops new buildings from being built, it doesn’t do anything about the projects that were already underway. As a result, even more new homes flood the market as existing construction projects are finished.
Eventually, there are far more houses on the market than there are buyers. At this point, the housing market usually experiences a downturn, with property values falling. In some cases, the downturn is more like a crash, with property values plummeting practically overnight. Eventually, the process starts all over again.
Once you understand the real estate cycle, you can start watching for trends. For instance, if you are evaluating Newport News, VA real estate, keep an eye on how long properties are staying on the market. If most properties are getting snapped up right away, the market is most likely booming. On the other hand, if properties are sitting empty for a long period of time or if you notice a lot of new foreclosures hitting the market, it could be a sign that things are taking a turn for the worse.