California is usually a trend setter when it comes to the real estate market. Real estate professionals all over the United States are constantly watching the California real estate market like some kind of magical crystal ball. For the most part, California does lead the United States in real estate trends. In our next installment of, “The State of Real Estate,” we take a closer look at the real estate market in the city if Sacramento, California.

Like much of the United States, the real estate market in Sacramento has seen better days. In early 2006, the real estate market all over the United States was seeing massive growth. Houses were being built, and new houses were being sold in record numbers. Along with this spike in real estate activity, the value of homes in Sacramento also started to rise as well, but this growing trend quickly came to an end in late 2007.

The value of homes in Sacramento started to fall. The amount of new homes being constructed started to fall as well. They reached a record low in 2008, but halfway through the year, the value of homes started to rise again. The rest of the real estate market in the United States was still falling, but there was a spark of life in Sacramento. That spark was quickly extinguished in early 2009, when new home construction, and home values fell even lower than they did in 2008.

Since that dramatic fall in 2009, the real estate market in Sacramento market has never fully recovered. For the past three years it has seen some ups and downs, but it has not gotten back to where it was in 2008. It has started to show some signs of growth again since the beginning of 2012. If you are thinking about purchasing real estate in Sacramento, now is a great time. You will be able to get in while the prices are still low.

There are more people that live in the city of Denver than in any other city in the state of Colorado. It gets its nickname of, “The Mile High City” because the elevation is exactly one mile. While the elevation in the city of Denver may seem high, the value of real estate seems to be right on par with the rest of the country. In the third installment of our series entitled, “The State of Real Estate” we take a closer look at the value of properties in the city of Denver, but instead of using only five years or so of data, in this example we will go back to the mid 80s.

If you were a real estate investor who was smart enough to purchase a lot of property in Denver in the mid 80s, then you would have made some very serious amounts of money. The value of homes in Denver in the mid 80s was right around $50,000 per home. By the early parts of the year 2000, the value had almost tripled, and this roller coaster was not done yet.

In early 2006 the value of homes in Denver, Colorado peaked at around $140,000. The values began to fall in late 2007 where they hit rock bottom by early 2009. It was not a total loss because homes were still valued at around $122,000.

There was a steady increase to just around $128,000 in the early parts of 2010, and then the value of homes began to fall yet again. They reached a low point again in late 2011, but now they appear to be climbing back up again.

The value of home is still no where as low as it was in the mid 80s. The average value today is right around $125,500. This seems to be right in line with the rest of the United States.

The State of Real Estate In The Dallas Fort Worth Area

Texas is known for a few things. It is the second largest state in the United States and everything in Texas appears to be bigger, but there is one thing in the Dallas Fort Worth area that is not big and bloated, and that would have to be the value of homes. The overall housing market in the United States has seen a very rough and bumpy ride in the last five to six years. In the second part of our series entitled, “The State of Real Estate.” We take a closer look at the value of homes in the Dallas Fort Worth area.

Like most of the United States the value of homes in the Dallas Fort Worth area has been a bumpy ride. Over the past five years the value of homes in this area has fallen, but not quite as steeply as they have in cities like Miami.

Another very interesting thing to note about the value of homes in the Dallas Fort Worth Area is the roller coaster like peaks and valleys. Right when it looks as if the value of homes is reaching an all time low, it bounces right back up again, but it never seems to hit the same peak that it did back in the middle of 2007 when homes were valued at around $126,000.

In 2008 an economic recession started, and the value of homes fell to around $117,000, but by the end of the year they were back up again. The beginning of 2009 saw the biggest drop in value, where home values fell to as low as 111,000, but once again, they bounced back up to right around $121,00 by the middle of the year.

Fast forward to today. The values of homes in this area are now as low as they were in 2009. If the past values have any indication of what to expect, then the values of homes in the Dallas Fort Worth area should be on the rise.

Miami is one of the hottest cities in the world, and the term “hot” has absolutely nothing to do with the temperatures in Miami. In fact, one of the most appealing things about Miami is the year round moderate temperatures. People seem the like living in a city where the average year round temperatures are in the mid 80s. Miami also has some of the best beaches in the world. The warm blue waters of the Atlantic Ocean calmly wash up on the white sandy beaches every single day, and when the sun goes down, the city of Miami springs to life.

So what does the current state of the real estate market in the Miami and Fort Lauderdale are look like? Taking data from home sales in Miami from five years ago and comparing to home sales data today does not look very promising.

Five years ago home prices were at their peak. The lower valued homes were selling for an average of just over $320,000 in the beginning of the year 2007. In the first quarter of 2007, the value of homes peaked, and then the slow downward spiral began. By the end of the year 2007, home values were right around $300,000.

In 2008 something horrible happened, an economic recession started and the value of homes in the Miami Fort Lauderdale market fell dramatically. In just two short years the average value of a home in this area went from around $300,000 to right around $150,000 in the middle of 2009. From the middle of 2009 until today the average price of homes for sale in the Miami Fort Lauderdale area has slowly fallen. It has not been nearly as extreme as it was from 2007 – 2009, but the average value of the lower valued homes in Miami is now hovering just under $120,000.

This could be the prime time to start buying up property in Miami. Real estate investors can get in, and get some property while everything is very cheap.  As we said in our post on May 19th, foreign investors certainly think so.

It is no secret that the real estate market has had its ups and downs. If you were to take the data from the real estate market for the last 100 years or so and make a line graph, it would look like a blueprint for the world’s longest and craziest roller coaster ride, and for many people where the real estate market is an integral part of their life, it is a roller coaster ride. There are plenty of uphill climbs followed by high peaks that quickly plummet further down only to come to a smaller less thrilling peak before there is another huge climb towards the top. For some it may be the thrill of a lifetime, while others may find that it is just too much to handle.

Analyzing these peaks and valleys can make a real estate investor a lot of money. Knowing when the market is at its lowest could be a sign to make a purchase or two. Then it is up to the investor to see how long they want to hold on to the property. Real estate trends can also benefit people that are looking to buy homes as well.

There is more than just sales data to analyze. There is other data as well. Some of the most common data points that people will find the most interesting are the following:

The total amount of houses on the market – This is one of the single best pieces of data to help gauge the current state of the housing market. If there are too many houses for sale on the market, it could be a bad sign. If there are not enough houses for sale on the market, it could be a bad sign as well. Over the next few weeks we will be analyzing housing data from different areas around the country. Stay tuned for “The State of Real Estate.”

Is the housing market in a state of recovery? That is the one billion dollar question that everyone wants an answer to. There are some signs that could point to an improvement in the real estate market, but it may be too early to determine what is really going on.

One of the most obvious ways to gauge what is going on in the real estate market is to watch the current home sales. There are dozens of factors that can help pinpoint exactly what is happening. The amount of time that a home sits on the market is just one way to measure the real estate market. It helps to indicate how quickly houses are selling.

There is another industry sign that a lot of real estate investors are looking at today, and that is the amount of foreclosures that are currently on the market. This is one excellent way to determine if the housing market and the overall economy is going to start improving.

The good news is this. It appears that the amount of foreclosure properties on the market has slowed down, but does this mean that things are going to be getting back to normal anytime soon? It can be hard to tell from just foreclosures.

There were several markets that were hit harder than others with foreclosures. These markets are the ones to watch. Most of these real estate markets are starting to show good signs of improvement. When the real estate markets that were hit the hardest start showing signs of improvement, then it could be a sign that even better things are coming.

There still may be plenty of homes on the market that are just waiting for the foreclosure process to happen. The lack of foreclosures is a really good sign, but real estate investors are not 100% certain that the real estate market is making a turn for the better.

Many homes that should be in foreclosure are currently protected by law. There may be a flood of foreclosure properties suddenly appearing on the market if all of these homes that are being protected end up in the foreclosure process at the same time.

At any given time there could be as many as 5000 homes in one local market. Half of these homes are in some sort of trouble, but there could be even more in the future. It does not look like the housing market is out of the woods quite yet, but there is definitely a light at the end of the tunnel for homeowners and real estate investors.

One of the most popular methods of getting some literal foot traffic into a home is by offering a open house. It gives people an open invitation to browse the property. It gives them a chance to try things out before they decide to make a commitment, but do open houses really work, or do they just create more work for the real estate agent and the homeowner?

What would be considered a good conversion rate for an open house? An excellent conversion rate would be upwards of 50%, but open house conversions don’t quite stand up to those numbers. If you are planning an open house, then this article is not meant to burst your bubble, but less than two percent of all open houses convert into a sale that was a direct result of the open house. That is not a very good conversion.

What is the problem?
A lot of people that come to open houses never have any intentions of buying the property. An open house can be a great way to socialize and take advantage of free food and drinks. You may not think that people do this, but they do.

There are plenty of other reasons that open houses never convert. There could be poor communication between the real estate agent and the interested home buyers. People don’t always buy something the very first time that they see it. It may take weeks or months of follow ups to convince them that a purchase is the right choice. Is the real estate agent following up with all of the prospects? It can be difficult to follow up with everyone that attended the open house, but if the real estate agent knows what they are doing, then they should not have any problems following up.

Following up is also much more than a simple phone call, email or thank you. Over 40% of all real estate agents never follow up at all. That is why open houses are not converting as well as they should be. The other 60% will follow up with a simple thank you phone call or email. That is great, and the prospective home buyers will appreciate that, but it is not enough to convert them into a sale. This is where almost 100% of all real estate agents stop, but they need to continue with those follow ups in order to convert a curious home buyer into a sign on the dotted line home buyer.

Just when you thought it was safe to jump back into the real estate market, reports are showing that more than 50% of all real estate markets have seen a dramatic increase in foreclosure filings. This happened during the first three months of 2012. It could just be the final push to get them all filed, but depending on where you are in the real estate market this could be good or bad news to you.
Analysts were certain that the foreclosures had somewhat slowed down, but it appears as if there were quite a few foreclosure properties that were hiding in the shadows.

For people that own the homes that have recently received foreclosure filings, it is not very good news. For savvy real estate investors this is a completely different story. These properties that have recently gone into foreclosure could be great additions to a real estate portfolio. Real estate investors might be able to pick up these properties at auction. The good part for these savvy real estate investors will be the lower price that only a foreclosure auction can bring. Foreclosure home auctions can be a great way to buy some additional properties for a much lower price.

Once the real estate investor adds the property to their portfolio, they may need to also provide a little tender loving care to the property. A lot of homes that have gone through foreclosure are not in the best shape, but being able to purchase these homes at a much lower price still leaves plenty of budget room for some massive improvements. Once the improvements are made, the real estate investor may be able to turn around and sell the property for a sizable profit, but the smarter real estate investor will sit on the property and wait for the market to grow.

In a ten year period the real estate market could easily double or even triple in growth, and with it so will all of the properties. Once the real estate market is at its peak, the real estate investor can sell the property for an even larger profit than if they had chosen to sell it immediately.

While they are waiting for the market o increase, the real estate investors can always rent out the properties and still make a profit. One thing is for certain, these properties will not sit abandoned like they have in the past.

There are several key signs that always point to a very healthy real estate market. Knowing what these signs are can really help anyone that is interested in what the real estate market has to offer. You could be a first time home buyer, or you could be a seasoned real estate investor. The simple fact is this. Everyone benefits from a prosperous real estate market.

So what are some of these magical signs that point to a healthy or growing real estate market?
The first good sign is less houses on the market. If there are a lot of homes for sale it can quickly flood the market. Everything will then become diluted and worth less. The real estate market is your typical supply and demand market. Both the supply and the demand have to be equal in order for the market to thrive and prosper. When there are too many houses listed, then the market becomes over saturated, and many homes either won’t sell at all, or they will sit on the market for a very long time. Having less homes on the market is a good sign. It means that the demand is keeping up with the supply. People are buying homes.

Another great sign that goes right along with fewer houses on the market is a nice fresh inventory of homes for sale. People and real estate investors get tired of looking at all of the same houses all of the time. When houses sit on the market for months at a time it is not a good sign. A new and fresh homes for sale inventory shows that homes are being sold. This is always good news.

Prices also have a huge affect on the current market. When all of the home prices are too high it can create a saturated market. The prices need to be good to keep the buyers doing what they do best, buying. If the prices on all of the homes are too low, then there may not be enough properties to meet the demand. It all goes back to that supply and demand scenario. When the average list price on homes slowly starts to increase, it means that the housing market is doing better. The average price must rise slowly. If it does rise too fast, then it will force people to stop buying which can lead to a saturated housing market. Everything needs to be perfectly balanced. That is why we see so many housing market fluctuations throughout the years.

There are some areas of the country that are seeing much better real estate sales. This is partly due to smaller for sale inventory. A larger inventory of homes for sale can really make it difficult to find a home, and the longer that a home sits on the market, the harder it becomes to sell, and it is not just homes either. Condominiums, apartments, town homes and any other type of property that you can think of all fall into the same real estate market pool. When there are too many choices, the market suffers. When there are fewer choices, the market will grow. Here are a few markets where the for sale inventory has dropped. These may be the best markets to buy a home.

Oakland, California has seen the largest drop in for sale inventory. The homes for sale inventory in Oakland is just under 52% lower. The city of Oakland has a population of just under 400,000 people. That could quickly change when people start seeing how well the housing market is growing there.

There is more than one place in California that saw such a huge drop in for sale inventory. Bakersfield, California has also seen a very dramatic drop in for sale inventory. With a drop of just over 50%, the Bakersfield housing market is looking up.

If you like the idea of nights full of stars and some of the best painted sunrises and sunsets then set your sights on Phoenix, Arizona. The housing market in Phoenix is also showing some great signs of growth. The for sale inventory in this city has dropped 48%. Fewer homes for sale mean that more people are buying, and less people are selling.

As if the two cities in California were not enough, a third city is also showing some great signs of improvement. The for sale inventory has dropped about 45% in the last year, and the average price for homes for sale in Fresno is $159,500.

One of the hottest spots in the United States is also showing massive improvements. This city is not hot from heat because it has the cool waters of the Atlantic ocean on one side. This city is hot because of its popularity. Can you guess which city this is? If you guessed Miami then you are right. The for sale inventory in Miami has dropped around 42% This is making the town of Miami even hotter.