You want to know if the market is strong if you are buying or selling real estate. Having such information lets you know how flexible you need to be in your offers.

Sales have slowed across much of the East and West Coasts for sellers. Good news for buyers there. On the other hand, sales are picking up in parts of the interior of our country. A cheerful note to sellers. Let’s see what’s going on, why and what it means to you.

Many things affect the strength of the market, but some more than others. Is employment strong in your area? Are there jobs available that pay well? Abundant jobs that pay well help strengthen the housing market.

Is there a high inventory of newly built but unsold homes in your area? Has this inventory been increasing or decreasing? Sales tend to drop and prices drop when inventory is too high. This often happens when prices have moved above what the average family in an area can afford.

Where housing inventories are high

In Washington, DC, Miami, Florida, and Phoenix, Arizona, inventories of new unsold homes have risen sharply in the past twelve months. Those markets tend to be better for buyers than in the recent past.

Where housing inventories are low

In Texas, Dallas and Houston have very low increases in housing stock and a good job outlook. Prices are increasing there. Families are buying houses. Investors are also exploring the area and buying. This has created a situation that is very helpful for sellers, which is somewhat ironic given that Texas has generally missed out on the real estate boom of the past six years.

What is happening in your market

How do you find out what the market is like in your area? Read the local newspaper. Are there “reduced price” or “buy now before the next price increase” phrases in ads for homes for sale? Are there stories of layoffs or new employers coming to town? Call your local builders association, realtors association, Chamber of Commerce. Ask a lot of questions about the number of unsold houses today compared to the number a year ago. Ask the Chamber of Commerce about employers coming or going out of town. Visit models in new communities and also ask a lot of questions there.

Soon you will have your own opinion about what is going on in the part of the country where you want to buy or sell. His strategy should be tailored to the strength of his position as a buyer or seller. Understanding the market you will be trading in is a good starting point.