Friday, July 15, 2011

HOW TO TIME THE MARKET ~ THE FIVE KEY "VITAL SIGN" INDICATORS

Real estate trends don't change direction without giving you "WARNING SIGNS" in advance. Identifying a trend change early is what allows you to sell when the market is peaking . . . and buy when the market is hitting bottom.

The five "Vital Sign" indicators in them Phoenix Residential Market Report read the market's warning signs . . . and give you "advance notice" when the current trend in Phoenix real estate is going to change direction.

How accurate are these "Vital Sign" indicators? Very accurate . . . as you'll see in a moment. When the "Vital Sign" indicators are positive, rising prices are almost guaranteed for Phoenix real estate. When they turn negative, a death sentence for price appreciation is near certain.

The Five Key "Vital Sign" Indicators


Vital Sign Indicator #1 : Interest rates.
Interest rates act on property values the same way gravity acts on physical objects. The higher the rate, the greater the downward pull. In other words, rising interest rates have a depressing effect on real estate prices . . . while falling rates tend to raise prices.

Vital Sign Indicator #2 : Home sales.
Home buyers are a dominant force that drive real estate prices higher . . . and lower. It's simple supply and demand. When the number of buyers are increasing, more homes sell . . . and prices go up. When buyers are more scarce, less homes sell . . . and prices tend to go lower. 

Vital Sign Indicator #3 : New home building permits .
New home builders respond to the market place according to demand. When demand is strong, they "pull" more building permits so they can build ~ and sell ~ more homes. When demand is weak, they pull fewer building permits so they won't be stuck with a lot of unsold homes in a softening real estate market.

Vital Sign Indicator #4 : Loan Defaults
Homeowners who default on their mortgage loans are generally having money troubles. This is a sign of a weakening economy . . . which soon translates into a weakening real estate market. When homeowners are defaulting less on their mortgage loans this is a sign of an improving economy and real estate market.

Vital Sign Indicator #5 : Foreclosure Sales
Property owners who default on their mortgage loans – allowing their homes to be sold at a foreclosure sale – are generally having severe money troubles. Like loan defaults, therefore, the number of foreclosure sales is a clear measure of the health of the economy. This determines whether real estate prices are likely to rise ~ or fall. 

No comments:

Post a Comment