It doesn’t matter if you’re buying or selling, the real estate market can be confusing.
It changes day by day, week by week; the home that you buy at one price can become a completely different value only a few years later. There are many components involved in real estate, and today we’re partnering with Restumping Melbourne to discuss. Restumping Melbourne is the premier restumping company in the Melbourne area of Australia. They’re dedicated to reinforcing the foundation of your home, setting you up for success from the ground up (literally and figuratively).
Let’s first look at the weekly cycle.
Inside tip – homes tend to go on the market on Thursdays and Fridays of each week. Looking at homes on the weekend is probably your best bet because if you’re looking during the week, they’re probably under contract or have offers on them.
Spring and fall are also big timeframes for prospective buyers, which will drive prices up. In fact, the most popular month to find new listings is April, followed by March and May. This is mainly due to purchasing families who are operating on a school year calendar. The market begins to slow down in July and August, with an upswing beginning in December.
On the flip side, if you’re selling, you should target the above timeframes for the most value and the best offer. Experts recommend that you list a home a few weeks prior to the peak seasons listed above.
Now let’s talk about the history of the real estate market. For a long time, owning a home was the exception, not the rule. It was really only farmers who owned land. The National Bank Acts of the 1860s were the foundation for mortgages. After the Industrial Revolution and into the 1900s, this began to shift, but it wasn’t until the late 1940s that even half of Americans owned their homes. As of 2010, 66.5% of Americans owned a home. This number has actually decreased within the last decade. As of January, the homeownership rate was 64.5%.
There have been a few key historical events which have heavily influenced the ebb and flow of the real estate market. The Great Depression was a big one. Banks didn’t have any money to lend, so borrowers had no cash to buy. A lot of existing homeowners defaulted on their loans – there was even one point in the 1930s when 10% of all homes were in foreclosure.
This prompted the creation of organizations like the Federal Housing Administration and the Federal National Mortgage Association to help put a halt to the housing crash and push the rates of homeownership back up. After the Great Depression, however, the big push was for the GI Bill, which was passed in 1944. A whopping 20% of single-family homes in the following 20 years were financed with help from this program.
Fast-forward 60-ish years and we all probably remember the financial crisis of 2007-2008. The US Secretary of the Treasury called the bursting housing bubble, “the most significant risk to our economy” and many believe that it was a causing factor of the Great Recession of 2007-2009. The burst of the housing bubble impacted mortgage markets, real estate, home builders and even hedge funds on Wall Street. Housing prices peaked at the beginning of 2006 but declined steadily over the next six years.
Values have now gone back up, but 58% of homeowners believe that they’ll see another bubble and burst in the next few years. 83% believe that now is a good time to sell. The national average family home price is more than 32% higher than inflation. That’s comparable to 2005, right before the last crash.
What can you do to stay in the know? Keep an eye on the Housing Bellwether Barometer – an index of mortgage companies and homebuilders. Also, make sure that you’re regularly keeping an eye on the prices of homes in your area. Be sure to check back in here, where it’s our mission to educate and build relationships with our clients. Also make sure to visit the Restumping Melbourne site, to keep your property safe and comfortable from the ground up.
Sam from Restumping Melbourne has been reinforcing the foundations of his community for decades, and is passionate about sharing his foundation know-how.