National & Local Real Estate Market Cycle Factors

Have you ever wondered how or why the real estate market follows cycles?

As with most concepts, ideas and opinions vary, and very few scenarios should include a blanket statement answer. Fact of the matter is that many aspects contribute to each area, with such complexity that truly determining the entire list of factors that affect any market cycle change, or series of changes, is not realistic or probable.

With that being said, there are certain high level aspects nationally and locally that contribute, affect, and determine the transition and current state of any real estate market. If you’re a real estate professional, investor, or financial company, you’re probably already aware of national and local factors that contribute to the market cycle changes within the real estate industry.

Why though are national and local factors important, even for consumers (buyers and renters) and non-industry related professionals?

If you can recognize, even as a one-time home buyer, the current national and local factors that contribute to a real estate market cycle, then you can feasibly understand, with educated reasoning, how those factors help you make a smart financial investment that ultimately allows you to Know the Home Before You Buy™.

As discussed by Dean Graziosi, one of the most highly acclaimed real estate investors in the country, various components exist within both national and local real estate market cycle factors:

National Factors:

• Interest Rates: (High Importance)
• Business Cycles
• Inflation
• Flow of Investment Funds
• Cataclysmic Events: (Usually Unpredictable)

Local Factors:

• Supply & Demand: (High Importance)
• Neighborhood Trends
• Migration & Job Growth
• Development Plans
• New Construction

Next week, we’ll dig a little deeper into each national factor component, exploring more information and aspects that relate and contribute to the current, past, and future predictability of national and local real estate cycles.

Until then, Know the Home Before You Buy™ by visiting www.NationwideHomeFax.com for all of your national real estate information needs & be sure to schedule your next seller’s inspection, pre-listing inspection, or home inspection with Home Fax™ Inspections.

Nationwide Home Fax™ LLC, its affiliates, The Home Fax™ Blog, and the author of this posting are not affiliated with Dean Graziosi, or any of his entity(s) or party(s), and have referenced information used through this posting strictly as a secondary source from Mr. Graziosi’s book How to be a Real Estate Millionaire, without obligation or compensation.

Expectations v. Reality During a Home Inspection

A home inspection is a standard procedure during most home purchases, but many common expectations are met with misconceptions.

#1: A home inspection is a limited visual observation

Many buyers expect an inspector find hidden issues, sometimes discovered later on during the home tenure, such as issues within wall framing, footing drains, and other areas of the inspection that are not exposed. In reality, inspectors can only inspect what is visible and typically exposed. Good inspectors understand the cause-and-effect of one observation to a defect, or set of defects, but the reality is that no inspector can ever determine all of the defects that may exist within or around a home.

#2: A home inspection is not a code inspection

Home inspectors are not code inspectors. Codes vary by city, county, and state. Code inspectors, sometimes referred to as building inspectors, are employed within the city or county and are familiar with specific codes within their specific jurisdiction. Home inspectors are not required to know each city’s codes, which would be very difficult if not impossible, and therefore are not code inspectors. This does not mean your inspector is not a professional or expert. The responsibilities are not the same and buyers should understand that an inspector may not be able to speak to specific codes during an inspection.

#3: Not everything visible is required to be inspected.

Every buyer needs to understand the contingencies around what is not inspected during a standard home inspection. Home inspectors are trained to inspect and describe major systems and components of any home, but often do not include accessories and areas that are excluded from the Standards of Practice and expose the inspector to unnecessary risk. For example, window awnings, pools, furnace humidifiers, gazebos, well water and well depths, and other areas and components are not typically inspected. Buyers should fully understand the contingencies that apply to their inspection, as noted within the pre-inspection agreement.

Whether you are a buyer, seller, or agent let the professionals at Home Fax Inspections fulfill all of your home inspection and seller inspection needs by visiting our website or contacting us directly at 248-229-0945. God Bless!

Informed home buying decisions: Why everyone must Know the Home Before You Buy™

 "Decision making is complex. On our own, our tendency to yield to short-term temptations may be too strong for our rational, long-term planning." -- Peter Singer

The pattern of poor home buying decisions and horror stories of withering financial investments in property purchases never seizes to amaze us.  Whether it be the standpoint of the “unnecessary” expense of a home inspection, to the lack of research and informed decision making conducted prior to purchasing a property, to the economic disparity that leads to poor home maintenance -- more and more people continue to enter into poor home buying decisions. 

As a result, many poor home buying decisions have negatively impacted home sales and values, while increasing the rate of short-sales and foreclosures.

The cost of this may be small or great, quickly encountered or experienced later, but one point is consistent for most people: the purchase of a property is one of, if not the largest investment you will make in your lifetime.  How many times will you spend $100k, $200k, or maybe even a $1,000,000 on any one purchase in your lifetime again? Not to mention, don’t we all want ourselves and our family to be happy, safe, and comfortable with the home we live and invest in?  

Let’s face the facts…

We’ve all heard of or experienced the horror story of a new home purchase, rental property, or new move.  Most people consider a home inspection through the process of purchasing a property, but many do not understand the various aspects of the Home, Homeowner, Neighborhood and Community which contribute to their overall long-term happiness, return on investment, and susceptibility of that purchase or lease agreement. 

Inadvertently as a result, poor home ownership decisions and a lack of informed decision making has fostered a higher demand for rental properties; currently averaging $904 per month nationwide. Prior homeowners, and many others, fear the idea of property ownership based on past mistakes, distorted views from TV shows and opinions, and financial struggles that have led them to few additional options other than rental tenancy. The fact of the matter is that many prior homeowners, young adults, and current tenants were never aware, or are still unaware of the options, assistance, and information services available to them.

Next week we will review the Home Fax™ Report options available to buyers, sellers, renters and investors for home purchases from Nationwide Home Fax™ and home inspections from Home Fax™ Inspections.