Assessing the Market

PUNDITS OFTEN TALK about the state of the national housing market. But that’s not terribly helpful if you’re looking to buy a home. Why not? The housing market varies so much from one part of the country to another.

How can you get a handle on the local property market? Ask a local real estate agent for details on recent sales, including how long it’s taking properties to sell and how final selling prices compare to list prices. Visit real estate sites such as Realtor.com, Redfin.com, Trulia.com and Zillow.com. Go to open houses in your neighborhood—even if you’re looking to sell, not buy. That way, you can get a reality check on whether you are pricing your home properly.

If you are looking both to sell and buy within the same local market, you shouldn’t be too bothered if the market is buoyant or depressed. Even if you’re suffering on one side of the transaction, by receiving too little or paying too much, you presumably are benefiting on the other side.

Buying in a market that’s overly exuberant? Think twice before getting into a bidding war. You could end up suffering from the so-called winner’s curse. What’s that? Winners of bidding wars often discover they paid too much, while those with cooler heads had a better handle on the home’s value. Before you blithely boost your bid by $20,000, think about how many months you would have to work to save that sort of money.

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