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Understanding the Market

     It is said that an aware customer is a happy customer, and at no time is this truer than when it comes to purchasing a home. Whether you are a first, second or third time home buyer, understanding factors that influence the market will greatly improve your chances of getting exactly what you want. When deciding what, where and when to buy, it will be of use to examine fluctuating market trends, such as pricing in reference to location, mortgage rates, development projects, property value and the best time to buy; by knowing what to look for you will have more control over your investment.

     When shopping for a home you must keep two key things in mind; firstly, affordability, and secondly, value increase. Ensuring you can afford the home you would like to purchase will you save time, money and hassle. Fitting you new home into your budget is a necessary and rewarding task to achieve prior to looking shopping around. As for value increase; it is absolutely imperative that you take into consideration all of the factors that will have an impact on the price of your home; not only at the time of purchase, but also at time of resale (if you so choose).

     The closer you are to a city and all its conveniences, the more costly your purchase will be. However, if you are willing to commute, you can more than likely get the same urban style home in suburbia, for a third the cost. Over 50% of all western residents live in suburban locations. This route of purchase may also be beneficial if you ever decide to sell your home, that is, as urban areas move farther and farther away from their central point, houses within the new developing areas increase in value.

     In relation to location, you may also want to examine the future construction of neighbourhoods; home-building companies will often build entire neighbourhoods in areas just outside the city limits, in turn, considerably increasing the value of pre-existing homes within the vicinity. Also, as new development projects are implemented, property, not just home value, will increase. With that being said, it may be more economically realistic to purchase a home that is not situated close to a housing development project. Remember, with increased property value comes increased property taxes.

     Another factor that influences home buying trends is the notion of supply and demand. In every real estate market there are always more houses for sale than there are buyers. As a buyer, you can use this to your advantage; not only are your options far greater than you may have initially thought, but your price negotiation widow is also a lot larger, and your time to choose, a lot longer. Do not feel pressured to buy a home, the market is too vast to rush into an unprepared purchase. Shop around, and be careful not to make and impulse buy.

     It may be helpful to know that in cold climates, home value automatically increases in the spring and summer months. The reasoning for this is that, purchasers tend to want to buy houses in warm months when, not only can they see the full profile of the house, i.e. the roof, front lawn, driveway, etc., but the process of physically going to view the home is less demanding. Because more homes will be shown in the spring and summer months, there will be more people competing for the same home, in turn, driving the price of the home up; usually no more than 3% of the original cost.

     Prior to purchasing a home, you will definitely want to analyze the current mortgage rates, as well as purchasing and selling trends in your area. Almost every state and province have their own Market Analysis Centre that can prove to be of much use when trying to determine whether it's a buyer's, seller's or balanced market. These centres publish market reports on a regular basis and are your best source for following market trends.

     Perhaps the largest influencing factor on the real estate market is mortgage rates.

     With a plethora of possibilities it may be hard to determine how much you need and how long you need it for; again, shopping around for the best possible price will ensure that you are completely satisfied with your choice. For information relating the mortgage rates, please see the Home Financing section.