When should I Buy, Sell or Invest in Real Estate? Whether you are deciding to upgrade or downgrade the family home or you are looking to invest in the Scottsdale Residential Real Estate Market it is absolutely necessary to understand some of the key factors that define the Real Estate Market. Whether selling or purchasing Real Estate, the decision making process will always be speculative, there is no sure fire way to forecast the future to determine whether or not the right decision was made. However, there is a process which can be followed that will minimize risk and make your decision making process an informative one based on data, knowledge, and expertise. This process relies heavily on two very important areas; Understanding current Economic and Demographic conditions and working with Real estate Professionals who are licensed and regulated to serve your best interest.

There are significant Economic and Demographic conditions which may affect your decision to buy or sell in the current real estate market and one of the best tools to have on your side is information. Most all decisions, albeit, business or personal at some point involve historical background information in order to make an informed decision. For instance, Scottsdale, prior to the Real Estate Bubble enjoyed an average of 6.8% home appreciation rate year over year prior to 2006 while still maintaining relatively low median homes prices compared to national averages. This, along with affordable land, and office space brought many companies and investment opportunities to the Scottsdale area which in return drove home, land and office values up. This is commonly known as a spike and can be easily visualized when graphed properly year over year. Currently, we have noticed that home values have dropped, Mortgage interest rates are near historical lows, foreclosures are high and vacant pre-foreclosure and REO/Bank owned homes are abundant. This information if graphed appropriately would reveal a downward trend, again providing insight and knowledge to make an informed decision. In simple terms the below graph may illustrate the historical example just described.

By observing the graph above it is simple to decide where you would minimize your risk in purchasing or investing in Real Estate. Purchasing at the lowest price point possible is the objective. The purpose of the graph is to exaggerate the home buying process and highlight how you can and should use information such as this to determine where the most beneficial point for your financial position is when purchasing a home. The mistake many people make is chasing the bottom part of the curve (displayed above) only to have missed the curve due to other economic factors such as the increase in home price or quite possibly an increase in interest rates. The information provided here is not actual data, the chart displayed is for demonstration purposes only, however, the situation is relative to the current Real Estate Market and the general public’s hesitation in regards to deciding when is the right time to buy, sell or invest.

For a detailed market analysis and current market conditions that may affect your decision in buying, selling or investing in Arizona Real Estate please contact us directly. Minimize your risk by working with a Real Estate Professional that has experience with the factors mentioned in this article or educate your self by researching the Economic and Demographic information related to the city you live in, you might start with searching for your city’s local Chamber of Commerce.

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