Six Signs Your Home Will Increase In Value

Recent reports on the health of the economy and the housing market have shown improved conditions. The federal tax credit for first-time buyers, affordable home prices, and low interest rates also are driving many buyers into the market. However, housing markets are local, and can vary greatly from one to the next. Still, there are indicators on which homeowners can rely to determine whether their home’s value will rise.

MAKING SENSE OF THE STORY FOR CONSUMERS


•The unemployment rate in an area can help homeowners determine if their homes’ values is likely to rise. As the unemployment rate rises, fewer individuals are capable of purchasing homes, decreasing the demand for homes, and driving down prices. To find a city’s unemployment rate and whether it’s rising or falling, consumers can visit the Bureau of Labor Statistics’ Web site at http://www.bls.gov/lau.

• On average, foreclosed homes sell for 30 percent less than similar homes in the same area. However, that figure varies by housing market, according to an executive at RealtyTrac.com, which tracks foreclosures. As foreclosures increase, the average prices of homes in the neighborhood decrease. Visit http://www.realtrytrac.com to view properties in various stages of foreclosure, including foreclosure filings, auctions, and bank repossessions.


•Tracking a neighborhood’s inventory supply also is a good indicator. A supply of five to six months is considered “normal.” For the most extensive inventory level comparisons, homeowners should contact a local REALTOR®. Homeowners without an existing relationship with a REALTOR® can use the “Find a REALTOR®” function on the CALIFORNIA ASSOCIATION OF REALTORS®’ Web site to find the REALTOR® nearest them.

•Following the list-to-sale-price ratios of a neighborhood can help determine the direction of home prices in an area. If the price difference is shrinking for an area, that suggests the real estate market is improving. Some real estate Web sites offer this information, or homeowners can contact their REALTOR® who can provide the average list-to-sales price ratio and a historical comparison.

Source: California Association of Realtors