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Finding the right property at auction isn’t just about having the means or experience, it’s also about timing. In the same way that traditional home sales have peak seasons and downturns, the best time to buy a property at auction can be impacted by everything from the weather to the local economy. Let’s take a look at two key ways investors can discern when they might have the most success at auction.
Researching national and local foreclosure rates is a good starting point because this data can give investors an idea of how much inventory is on the market and where to find it. The national foreclosure rate provides insight into the country’s current condition and the volume of debt held by mortgage holders nationwide. Knowing this information may help investors anticipate major financial downturns like the 2008 recession.
On the local level, keeping an eye on economic conditions in specific areas offers the chance to strategically invest in places that are likely to have higher foreclosure rates. For example, rural communities with a small handful of major employers may see an influx in foreclosures if one of those organizations has mass layoffs or relocates to another city. Similarly, major cities with high costs of living may have consistently high foreclosure rates due to expensive mortgages and less affordable alternatives for residents. Changes in specific locales offer greater insight into the available opportunities in an investor’s desired market.
Information about foreclosure rates and housing data can be found online and platforms like Hubzu offer real-time auctions and daily property updates that keep investors abreast of evolving local trends.
Traditional real estate isn’t the only market affected by seasonal changes. The auction side has similar ebbs and flows, with most investors looking to buy and sell in the spring and summer months. This is due to many factors, including warmer seasons being viewed as a better time to show homes to prospective buyers or renters. There’s also the very reasonable desire to avoid house hunting in the cold and asking clients to do the same.
Though the spring and summer are a great time to participate in an auction, there are also plenty of good reasons to start investing during peak sweater weather. For one, many competing investors may take the winter off. That means less competition at auction and in turn, potentially lower bids. The possibility of purchasing an auction property at a lower price also comes with the opportunity to invest some of the savings into rehabilitation efforts if needed. Buying and renovating the home during the colder months can help an investor be the first on the market come springtime. Additionally, near the end of the year, some sellers may put their foreclosed properties up for auction. This gives investors the chance to purchase before year-end and start the new year with fresh properties in their portfolio.
Investors searching for their next property may find it helpful to balance their resources with strategic timing. Economic conditions and the time of year can influence success at home auctions and savvy investors will be sure to make sure their timing is just right.
Visit Hubzu.com/ThinkRealty to find and bid on foreclosures in your area.