Best Times to Buy & Sell Real Estate

Properly timing the sale of your home could mean tens of thousands of extra dollars in your pockets. Real estate, like many industries has cyclical periods that could have serious effects on buyers and sellers. As strange as it may sound, you can approach the real estate market like a farmer would consider his activities.

We can very easily identify the 4 seasons of spring, summer fall and winter in real estate. Lets use an investment property as an example and assuming that you want to be in the game for a long period of time.

A farmer would typically plant in the spring and harvest in the fall. Plan in the winter and tend in the summer. So how does this relate to real estate?

Real estate cycles don’t necessarily reflect the temperature outside or a particular calendar month. It illustrates the fact that prices don’t go up in a linear motion and there are months or years when prices increase more or less.

Just like a farmer would read books and educate himself about different products in the winter a real estate investor’s job is to take courses, learn new strategies, etc. when prices aren’t increasing at all.

When real estate prices start to rise, investors need to start purchasing or planting their seeds as a farmer would do the same.

Summer is the best cycle to be in either as a farmer or as an investor. When prices are still continuing to grow we need to look after our real estate portfolios. Sometimes we have to complete smaller renovations at our properties, find new tenants etc. At the end of the day our whole purpose is to manage our investments and make sure that our investment will be in great shape for harvest when it’s time to sell.

Fall, this is the most exciting time out of all 4 seasons. Lets rake in the profits! If you are a wine lover, you know that the sweetest wine comes from a late harvest. However the people producing the wine are sometimes risking all year’s work in case of an early frost. To determine the best time to sell, you really need to be on top of your game. I always recommend selling before everyone else does. Never wait to get out at the very top, leave something on the table for someone else to be greedy. To determine when it is the right time to sell, you need to be able to do your own due diligence about what’s driving the real estate industry.

Far too often, we listen to daily news and we only base our decisions on the short term outlook. Not that long ago, I read a newspaper article about our former Premier, Ralph Klein. In that article I was surprised to find out that he never reads the newspaper because he doesn’t care much about the daily news. He rather do his own research from an independent source who has no interest in providing bios information.

What if you aren’t looking at real estate as an investment? Rather you just want to decide what is the best time to sell your principal residence?

July, August, December and early January are usually the best times to buy. The reasons have to do with prices softening during these months and less buyers to compete with as most have taken a break from the market to go on vacation or they have committed themselves to some family time with holidays or recently succeeded in buying their home in the spring or fall.

Another reason these months can be good for buying pertains to the cycle of price increases--often in September (the fall market) and early spring (the spring market) the prices go up in our appreciating market. Just waiting an extra few weeks at certain times such as mid-August or early January can cost one 5-10% on their home purchase. Paying tens of thousand of dollars extra is an insane amount of money for waiting a few weeks longer for what one was planning on doing anyway when it was more convenient just because you waited an extra month.

Usually the increase in the fall is less than the one in the spring but several percent on a $500,000 house is very significant. If one is going to buy... it's non-sense to do it several weeks late and spending $10,000s of extra for the same property. In the fall the buyers come back to the market again as they get into their routines--kids going to school, working, vacation planning and a whole new set of buyers that are just starting with the hopes of being in a new home by the end of the year.

For sellers, the worst time of the year to sell are the months listed above that are the best time for buyers to purchase. Sellers listing in July/August/late Nov/Dec/Jan/early February are not going to get the highest dollar for their house. List at the time the demand is highest and when inventory takes a dip.

It pays off to think ahead a little bit and plan your moves in advance. Remember, just like a farmer knows when to spend time to educate himself, plant the seed and bring in the harvest. If you do the same, chances are good that you will maximize your profit.

Chennai Real Estate - Its Consumer's Market

Undergoing the period of correction for the past 6-months, Chennai real estate markets have finally started to stabilize, however the demand curve is still observed moving horizontally. As per industry reports, the city absorbed meager 13 per cent of the total supply of the residential space in the past quarter.

Chennai real estate received fresh additions of 3.4 million sq. ft of housing in the past quarter although a meager 0.47 million sq. ft of space was absorbed, studies point out.

Now that the prime banks like SBI, HDFC and ICICI have cut the interest rates on home loans, the markets are likely to catch up and real estate developers expect good time ahead this winter season.

Impact on prices

According to the Chennai based professionals, capital values in the residential real estate in Chennai had reached staggering levels that in fact were termed as unrealistic by buyers.

But now prices are almost down by 20 per cent, says R Ajay of Tirupati Real Estates. "But you cannot actually gauge that whether price corrections are spiking demand or not. Most of the new projects in the property markets of Chennai are actually making an oversupply and there is no junction between the volume of demand and supply," he adds.

Meanwhile, the prices of residential units in the sub-urban areas have moderated at the levels of Rs 2,500-4,000 per sq. ft, after peaking at Rs 5,000-Rs 6,000. The basic notion behind development of sub-urbs is generally low price range and if this factor escalates, there is no point people will consider buying properties in sub-urbs, Professor Raghu Aiyar commented.

Also, the investors who were expecting instant returns of 25-30 per cent on their property investment in Chennai are at tenterhooks, as the markets have been gradually shedding off all the speculative tendencies.

Outlook It's consumer's market Chennai real estate will add as many as 25,000 apartments in the next 12-24 months, from more than a dozen of townships alone and construction of standalone apartment buildings will further accumulate over the total additions.

In this scenario, the supply side would outstrip demand curve and of course, property sellers and developers have to downscale their margin expectations, say market analysts.

Real Estate Investment

Real estate is a risky and illiquid investment. As rates go up, it becomes a less desirable investment. Real estate also requires large cash outlays to acquire. That means that most acquirers of real estate must borrow the funds to acquire it.

As rates move higher, mortgage money becomes harder to get and the cost of carrying the investment real estate goes up, also making real estate less desirable to hold as an investment.

You are commenting mainly on the fact that the single family residence market did not suffer as much as would have been expected. But single family residences are not investment property as its primary purpose. And residential real estate may move contra cyclical to the investment real estate market because of demographics.

Finally during the 70's, investment real estate was being distorted by the then existing tax code which allowed a lot of deals to be done via limited partnerships.

As you saw, investment real estate gravely suffered when Congress changed the tax law. And that suffering took a long time to work out of the system. Just remember, at any particular point in time, different factors may be taking place that distorts what would normally be expected. The 70's was a period like that because of several factors as already mentioned; i.e. special demographic circumstances coming together with tax rules, as well as others that did have investment real estate reacting to basic economic factors differently then would have normally been expected.

There are many factors that could affect real estate, but in simple terms, when interest rates rise, demand for money falls. Demand for home mortgages probably is directly affected, and thereby home sales, and so residential property prices should fall, OR perhaps just not grow near as fast, OR just stagnate. I know in my neck of the woods, the combination of a major company laying off several hundred six figure earners and rising interest rates have made home buying in the better neighborhoods EXTREMELY attractive.

There will always be exceptions (like you mentioned, along the coast. I've been looking for a beach house, and they prices rise while I look!). Even the case Skip mentioned wasn't much of an exception. Sure, rates were increasing, but inflation was high, too. The Fed raised rates until it got inflation under control. As soon as inflation began to subside, the boom in real estate ended.

Mumbai Real Estate - Presenting New Opportunities

Mumbai is the most desired city for buying, selling or renting a property in India. A teeming metropolis, it has witnessed a burgeoning demand and supply of properties over the last couple of years. It is widely recognized across the world as an IT and ITES hub. This has resulted in high property prices in Mumbai which are now comparable to prices in cities like London, New York and Tokyo.

Locations in Mumbai like Worli, Bandra-Kurla Complex (BKC) and Lower Parel have seen rising demand in Grade-A office buildings. Andheri East and Nariman Point have also witnessed the high number of occupancy over the past few months about 90-95 per cent. There has been an increase of about 15-35 per cent in values for commercial properties and about 40 per cent in Mumbai residential properties.

Malabar Hill, Breach Candy and Altamount Road continue to be Mumbai's golden triangle. Residential properties in these areas sell in the range of Rs 30,000 to 50,000 a sq ft. With Mumbai real estate developers promoting sprawling townships, malls, software parks and office complexes across the city, places like Dharavi has seen a sharp rise in its property prices. A one-bedroom-hall-kitchen (BHK) house in the congested by lanes of Dharavi is to fetch at the same prices as in Kandivli or Borvli. Surprisingly, a 225 sq ft house, in the area would come at a high price of Rs 9 lakh. The biggest beneficiary of infrastructural developments have been the eastern suburbs of Navi Mumbai including areas like Kharghar, Airoli, CBD Belapur, and Sanpada which remain viable investment areas. Rates in Navi Mumbai range between Rs.3000 to Rs.5000 per sq ft.

Mumbai being the fashion capital is hit by the retail buzz too. With the opening up of the retail market, there has been a growing demand for mumbai properties in retail. The retail stores and malls are either owned by some business group or leased for hefty prices as the demand is very high. To find out more about Mumbai property and real estate, visit India's No.1 property site magicbricks.com.

Affordable Real Estate by Delhi Builders in Ghaziabad

Situated on Delhi's eastern periphery, Ghaziabad is rapidly emerging as the residential nucleus for IT professionals working in NOIDA and Delhi. Ghaziabad is also gaining popularity owing to its proximity to the Commonwealth Games locations.Newsweek included Ghaziabad in its list of '10 Most Dynamic Cities' in the world and described it as ' India's hottest city' that "is emerging as the next popular address for Delhi-bound commuters". As affordable housing becomes the key to sales in a slowing market, key Delhi real estate developers have developed affordable residential property along the NH-24, leading to Hapur, and along NH-58, leading to Meerut in Uttar Pradesh.

Ghaziabad's proximity to key business districts in Delhi makes it a good option for Delhi's residential real estate buyers. Large commercial developments in Noida and Greater Noida in the vicinity also adds to Ghaziabad's attraction to Delhi Property buyers. Also on the cards is a 1500-acre township, a hi-tech city in Ghaziabad. The city has emerged as one of the best investment destinations for Delhi property buyers.Ghaziabad will also be connected by the proposed Metro line in Delhi Metro Rail Corporation's Phase II link from Anand Vihar to Vaishali at Kaushambi. The project is scheduled to be completed by September 2010. There is also a proposal to develop 14 flyovers which will help in reducing the traffic congestion, leading to an increase in real estate value in Delhi's suburb - Ghaziabad .

The capital values in Indirapuram in Ghaziabad in October were between Rs. 3,000–3,500/sq ft (builder flats) and Rs 2800-3000/sq ft (Cooperative housing societies) for the month of October. (Source: MagicBricks.com). In spite of a slowdown in the Delhi NCR residential real estate market, Ghaziabad's property values have held or have risen marginally between August and October. Anil Kumar Singh, a broker operating in Ghaziabad says attributes the escalation in values to the increase in demand, good location and the fact that since almost everything is sold out so its re-sale transactions. Proximity to Delhi along with good connectivity and transport links is also considered a big advantage.