Are you expecting to move to the USA from Australia? You might need some info on the property market.
From September 2022, real estate prices in the USA have begun to drop. Up to 60% of properties have dropped prices from April to December 2022, and the market will crash in 2023. This is the perfect window for buying a property in the USA.
Look for a market with low MAI, low new median list price, low per square foot cost, high average and median days on market, price drops, high relisting rates, and moderate inventory. Find good neighbourhoods with access to important facilities.
To help you pick your ideal home, I’ll briefly explain what these real estate terms mean. I’ll then discuss 3 real estate markets as examples of cheap, average, and expensive markets.
Real Estate Terms You Should Know
To buy a property in the USA, you’ll have to be able to read the state of every real estate market. Understanding basic real estate terminology that expands on factors governing the real estate markets is crucial. Here are 7 terms that you have to be familiar with for identifying a good real estate market.
- Market Action Index: MAI measures supply and demand against present inventory and determines if it’s buyer or seller-friendly. Markets under 30 are buyer-friendly, while those over 30 are sellers’ markets. 27-33 is considered average. MAI is a quick and reliable way to find prospective real estate.
- New Median List Price: It is the midway selling price calculated for listed housing sold over a set duration. The new median list price shows the midpoint of recent sales, which is the true price of housing.
- Per Square Foot Cost: Weighing the amenities or facilities against the expected per square foot cost will help you make an informed decision.
- Days On Market: Average or median days on market indicate buyer interest and negotiation opportunities.
Aside from this, higher inventory and relisting rates will give you more options and more room to bargain.
Real Estate Markets Examples, And How to Read Them
To demonstrate how you can filter prospective real estate markets with these terms, I’ll talk about 3 example markets in December 2022. These markets will be analyzed from the buyer’s point of view.
Blackfoot, Idaho
Blackfoot is friendly to sellers and has cheap housing. However, the prices are too unstable for investing here. Here is its current state.
- MIA rating is 32.
- The median list price is $415,000, and the new median list price is $295,000.
- The cost per square foot is $158.
- The average days on market is 83, while the median days on market is 70.
- 60% more sellers have dropped prices since April 2022.
- Inventory has halted to 47.
- Over 40% of sellers have relisted.
Even with steep price drops, and prices close to $232,000 in December 2019, buyers are refusing to purchase. You can potentially lower prices close to $100,000, but this market is still not going to be profitable in 2023, perhaps even longer.
Blackfoot has low crime rates and a higher quality of life. But everything is too spaced apart, and going from place to place gets tiring.
Boise, Idaho
Boise is an average market where sellers or buyers may have slight advantages. Properties in such markets have decent drops in price but cumulatively rise in value over the years. Here’s the state of Boise right now.
- MIA rating is 37.
- The median list price is $532,000, and the new median list price is $499,000.
- The cost per square foot is $287.
- The average days on market is 93, while the median days on market is 77.
- 60% more sellers have dropped prices since April 2022.
- Inventory has decreased to 591.
- Only 12% of sellers have relisted.
The average home price in Boise has been steadily rising since 2017 due to increased demand from new residents and an influx of new businesses. In particular, the southwest part of town is experiencing some of the largest increases in home prices due to its desirable location near Downtown Boise and several popular neighborhoods. The average sale price for a single family home currently stands at $450,000 with many homes selling for much higher amounts depending on size and location.
Miami, Florida
Miami is a hostile or hot market that heavily favors sellers. Here’s a breakdown of the market’s state.
- MIA rating is at 42.
- The median list price is $699,999, and the new median list price is $650,000.
- The cost per square foot is $335.
- The average days on market is 93, while the median days on market is 70.
- 24% of sellers have dropped prices since April 2022.
- Inventory has decreased to 1,569.
- Only 9% of sellers have relisted.
Even with 24% of sellers dropping prices, Miami properties are not great prospects. The median list price in December 2019 was $489,000. High inventory, low relists, and high days on market only indicate disinterested buyers and overpricing.
Miami real estates are expensive, lavish lifestyle-focused. The area is crammed with luxury more than typical facilities like transit or institutions.
If you’re certain about buying a property in the USA, review the markets like these examples. Look for markets where buyers are waiting, like Boise, and keep track of the new median list price. When your prospects dip below or close to prices in December 2019, snatch them up.
