Pricing Your Home to Sell: Know the Economy and Inventory of Unsold Houses
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Pricing Your Home to Sell: Know the Economy and Inventory of Unsold Houses

It's important to get a handle on where the market is when you put your home up for sale. If there's a surplus of housing available, it's unlikely you'll be able to get top dollar for your house. A healthy economy means growth. More jobs mean more people who can afford to buy houses or who want to move up to bigger and better homes.
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Have I determined the inventory of unsold houses?

It's important to get a handle on where the market is when you put your home up for sale. If there's a surplus of housing available, it's unlikely you'll be able to get top dollar for your house. Indeed, prices may be softening and you may be lucky to get what comparables sold for last year. On the other hand, if there are shortages in the market (more buyers than homes for sale), prices should be stiffening, meaning you can get more for your property. The key, of course, is learning the true supply/demand status for your area. By the way, statistics thrown out by the media are usually not very helpful in that they typically give national or state figures on housing supplies. However, all real estate is local. What should concern you is the housing situation in your area, even your neighborhood. You can determine this by checking out the inventory of unsold homes. Again, an agent can easily provide you with this information. All real estate boards keep track of how many homes are currently listed. That's called the inventory of unsold homes. The higher the inventory, the softer the market. The lower the inventory, the hotter the market. (Sometimes this statistic is given in terms of how long it will take to sell out the inventory; for example, there are 6 month's worth of houses in inventory, or 18 months, or 2 months.) While it's important to know that a low number is better (for sellers) than a high number, it's even important to compare the inventory today and where it was 6 months, 1 year, 2 years, and 3 years ago. By comparing today's inventory with the past, you can very quickly see the trend - is a housing shortage or surplus developing? Will I do better by selling quickly before prices soften, or by waiting until they firm? Checking inventory is a great way of not only determining the present state of the housing market in your area, but estimating future trends as well.

Have I considered the economy?

You'll almost never hear economists saying that the economy is moving along just fine. Usually it's getting better... or worse. And that can affect what you'll be able to get from your house and how you should price it. Think jobs. A healthy economy means growth. More jobs mean more people who can afford to buy houses or who want to move up to bigger and better homes. Of course, as with inventory, what counts is what's happening in your area. If you're in Seattle and Boeing, Microsoft, and others are laying people off, chances are the housing market is set to take a tumble. If you're in Los Angeles and small businesses are growing at a rapid rate and are hiring furiously, chances are housing prices are going to go up. You can find out about your local economy just by reading the local newspaper on a regular basis - the media loves to focus on it. Check also with your local Chamber of Commerce, although you can expect them to give the best possible slant on local conditions. If you want some technical insight, check with a local college that has an economics department. It may have issued a "White Paper" on the subject, or even may refer you to a professor who would be willing to spend a few minutes on the phone explaining his or her perspective. Finally, use the Franchise Food Barometer. McDonald's, Burger King, Wendy's, Chili's, and all the dozens of other franchise food establishments pay economists millions of dollars to tell them where to put their restaurants. They want to go into areas of growth, where the economy is booming, where more and more people are moving who are likely to use their facilities. Thus, if there's a lot of franchise food growth in your area, it suggests a very healthy economy. On the other hand, if no new franchise food restaurants are opening - indeed some of the existing ones are closing - it suggests a local economy in the dumps.

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