The real estate market is in a constant cycle of ups and downs. When the cycle is humming along, homes are bought and sold quickly, but when the cycle is slow, there are usually many more homes on the market than buyers for them or vice versa. You may have heard phrases like 'Buyers Market' or 'Sellers Market' before, but the truth is the real estate market is constantly changing, which means some times the market is better for buyers, sellers, or both.

Buying in a Slow Market

Long Island as in many other regions of the US has been affected by the slow real estate market in the past year. While the forecasts remain the same for the upcoming year, homes are still being bought and sold. Depending on your housing needs, your chances of finding a home that meet these needs are very good.

If you're hesitant to buy during this time, keep in mind that there is never a 'perfect' time to purchase a home in the real estate cycle. Since you have no control over how the cycle will move, concentrating on your own financial well-being is more important.

When buying a home, make sure that you are financially able to make mortgage payments each month. While it may be tempting to purchase a larger home or additional land during a slow market, having foresight and realizing what you can afford today will help you make the best decision.

Buying in a Fast Moving Market

When the real estate market is moving, homes are bought and sold quickly. Unfortunately, for home buyers, taking the time to thoroughly investigate their financial resources is not an option if they want to buy a particular home.

This is one reason why the subprime mortgage industry was able to grant so many adjustable rate mortgage loans to those who should not have qualified for them. But because homes were being sold so quickly and because housing prices had soared, the only way for many to afford a home was to take out one of these loans.

As a result, this year the foreclosure rate was higher because as interest rates went up, so did monthly mortgage payments for those who had subprime loans.

Why the Real Estate Market Changes

Factors including unemployment, inflation, and the recent collapse of the subprime mortgage industry play a role in how quickly or slowly the real estate cycle moves. When researching homes, try to determine the average income of those living in the area. Also, research the industries that are generating the most income in the region to determine how the real estate cycle is moving.

Those who feel secure in their jobs, live below or equal to their means, and those who have invested time and money in their homes will be less affected by changes in the cycle. While it may take longer for them to sell their home during slower times, the need to sell usually does not exist. Those who fear foreclosure are the ones under the most stress during a slow real estate cycle.

When buying a home, you need to prepare in advance before beginning your house hunt. Knowing exactly what you can afford, being preapproved for a fixed rate loan if possible, and not being persuaded by a real estate market can help you make sound economical decisions.