I have a curious fascination with physical and chemical properties.
Especially the amazing substance of water. It exists in three states;
Solid, liquid and gas. During the conversion from one state to another, the
physical property of water changes but the chemical state remains the same-
the structure is always H-O-H. The changes in physical states of water depend on temperature and pressure and effect how close the molecules are together. Close molecules in water result in a solid state such as ice. If the molecules are not as close then ice becomes a liquid, which we know as water. Finally, when water molecules are furthest apart the physical state transitions to a gas form such as steam. A similar trifecta can be shared with the real estate market. There are typically three states to the real estate market:
- A buyer’s market is similar to the “solid state” of water. In the solid state, the “home molecules” are close together leaving an abundance of homes on the market thus having a solid supply of inventory which translate to an abundance of homes for buyers to choose from.
- A seller’s market is similar to the “gas state” of water. In the gas state the “home molecules” are far apart which means there is very little inventory for a buyer to choose from. This creates demand and makes for very happy sellers!
- A balanced market is similar to the “liquid state”. This is a fluid market where the “home molecules” are somewhat evenly spread out. Inventory is normal compared to the other two extremes. Sales numbers have stabilized.
Knowing the real estate trends helps consumers to know the best time to buy and sell. Even though most of us think of our home as a place to live and raise a family (and it is) , let us not forget that real estate is one of the best investments one can make if we recognize life sustaining properties of our properties.