The real estate market tends to be cyclical with some periods favoring buyers and other periods favoring sellers. As with other free markets, the pricing and availability of real estate is directly related to the forces of supply and demand. While many real estate markets in the United States are experiencing a substantial slowdown, other markets remain robust, and some even continue to grow. What makes the situation even more complicated is that even within a particular city or county, there may be some areas that are hot and others that are cold.

In regions of the country in which the real estate market is slowing, there are some things homebuyers can do to increase their chance of getting the property that they want on terms that are favorable. Below are some strategies to consider:

1. Clarify What You Want. Be sure to understand what kind of property you want (e.g. bedrooms, bathrooms, size, yard, location, etc.). Identify items that you “must have” and items that you would be willing to forego if your other priorities were met.

2. Consult Experts. You’ve no doubt heard the saying that “all real estate is local,” so arm yourself with the best information available. Consult a local real estate expert who can guide you about what communities are hot and which ones are not. Obviously, you are more likely to find deals in communities that have excess supply and limited demand than vice versa.

3. Understand Market Data. Obtaining and evaluating data can be one of the most powerful tools in your arsenal. Identify communities that you find desirable and ask your real estate agent to provide you relevant sales statistics. For example, your agent can provide you:

a. A summary of how many properties are available in communities that you deem desirable.

b. How long properties are taking to sell this month, last month, last quarter, last year, etc.

c. How many properties have sold this month, last month, last quarter, last year, etc.

d. Changes in the median and average price of properties for a community this month, last month, last quarter, last year, etc.

e. Data on the sales price to list price ratio (SP: LP). This ratio provides information about how much, on average, sellers are reducing their price.

f. Detailed data on properties that are similar to the type of property you desire (often known as “comparables” or “comps”).

4. High Inventory Communities. Identify, or ask your agent to identify, communities that appear to be particularly slow, and that have an unusually large inventory of homes. You will have a broader variety of options in these communities, and you may increase the likelihood of finding a better deal.

5. Loan Pre-Approval. Be sure to consult with your bank or mortgage broker and obtain a loan pre-approval document. This not only let’s you know how much you can afford, but it also demonstrates to sellers that you are a serious buyer and that your offer is worthy of serious consideration.

6. Seller’s Motivation. While information about why a seller is selling is usually confidential, there are situations in which the seller will allow their agent to disclose important factors regarding their personal situation. Be sure to ask your agent to inquire about any information that the seller has disclosed to his/her agent that can be conveyed to your agent. This information may help you decide on making an offer on a property and the price you wish to offer.

7. Home Inspection. A home inspection conducted by a qualified inspector can provide you valuable information about the condition of a property. Moreover, if there are items that need repair or replacement, you can use this information to modify your offer price or terms.

8. Expand Search Scope. As mentioned above, even within a particular city or county, there may be some areas that are hot and others that are not. Be sure to provided detailed information about what you want to your agent, so that he/she can provide you a variety of community options.

9. Be Patient. Time is on your side when there is excess supply and insufficient demand. Try not to “fall in love” with a house so much that you cannot be objective. It may be that multiple offers and counter-offers occur before you either get the property you want or decide to walk way from a deal. You may also want to look at more properties than you normally would, so that you are exposed to a variety of options.

While the above is not an exhaustive list of strategies, it is a good starting point of issues to consider when buying real estate, particularly in a market that favors buyers. Obtain the services of a knowledgeable Real Estate agent who can provide you with additional strategies to help you reach your real estate objectives.

The call for new taxes on flights to reduce carbon emissions could impact the prices of properties, according to a UK based overseas property company.

‘There has been more discussion and calls for action recently over the impact that air travel is having on the environment,’ they say, ‘And one of the most obvious ways to cut air travel is to raise the price of travelling through taxes. It’s a win-win situation for governments, more tax revenue and being seen combating global warming at the same time. It’s only a matter of time before cheap air fares on the scale we see it today comes to an end’.

Owning a second home and a property abroad has shown to be an aspiration for the majority of UK residents by recent surveys, and low cost carriers have opened up new overseas property markets by flying to destinations not covered by other airlines, or forcing flight prices down where they compete directly with more established carriers.

Property prices within a one hour drive of regional airports served by the low cost airlines have tended to escalate in recent years, and it is these areas that would be hardest hit by any increased taxes on flying.

The areas which would feel least impact would be northern France, which many UK second home owners access via ferry and the Channel Tunnel, and areas where owning a property abroad was in vogue long before the new airlines started, and when air fares were proportionately higher than they are today. Access to France from the UK has improved recently with Eurotunnel cutting the journey time by twenty minutes.

‘The Costa del Sol for example we feel wouldn’t be impacted much by increased air taxes – although over development could bring prices down there anyway’.

But there is a warning that the lower priced end of the market could be hit more than the top end.

Bargain Properties

‘There has been a significant increase in second home ownership in the last decade’, say the company. ‘Gone are the days when it was just the wealthy who owned an overseas property. Developers in Spain, Greece and Cyprus have built apartment blocks with units of two and three bedrooms that are affordable for a lot of middle income families. Given that mortgages are readily available and it’s often just twenty per cent of the asking price that needs to be found an overseas home has become reality for millions of Europeans. But if air fares increase significantly and the holiday makers who rent the owners apartments and villas declines, quite a few will need to sell as the rental income pays the mortgage. There could be a glut of properties come to the market which will send prices downwards.’

Exceptions to the rule could be in the two European tax havens of Monaco and Andorra, where there is no income tax for residents.

‘Historically tax havens have been popular no matter how the economy is. When someone buys a property in Monaco it often doesn’t matter to them if it’s a few million Euros as they’re going to save more than that in tax during the time they stay there. Andorra is slightly different as it’s a tax haven but also people buy ski apartments there, adding to demand’.

Andorra property prices have risen an average of ten per cent a year in the last decade, and some predictions are for that figure to be closer to fifteen per cent for 2006.

If governments do start introducing new air fare taxes to slow and possibly reverse the rise in air travel there could be good news for some property buyers though.

‘In some areas the second home market has increased prices significantly, with many of the younger local population being forced to move away from their towns and villages.

The UK and US populations are quite mobile, but in some countries popular with holiday home buyers there are three or four generations of the same family in a village or town. But as overseas property buyers have moved in and pushed prices up, the younger generations ahave been forced to look away from these popular areas because they cannot afford a property in their home town anymore, and a lot of the local employment has become seasonal. If real estate prices come down they might be able to afford to live in the villages where they were brought up if they choose to do so. Some will still move away but at least they will have a choice.’

Conversely, far from changing traditional towns and villages into holiday resorts, overseas property buyers can sometimes have a positive affect on preserving traditional village life.

‘In France for example, many of the rural villages were dying a slow death as the younger generations moved away to the bigger towns and cities to find work. British second home buyers have revived the villages by buying run down properties and renovated them, breathing new life into the communities. The property market is nothing if it isn’t adaptable,’ they conclude, ‘And while there will be regions that will suffer as a result of a declining market, there will be winners too.’

House prices in Andorra have risen by an average of ten per cent a year over the last decade, with the last two years showing particularly impressive gains of 19 and 16 per cent.

But 2007 was set to see a freeze in the rises as the traditional ski season sales failed to materialise.

The 2007 ski season was a catstrophe for Andorra, with tourists shunning the country as snow levels were so poor, the worst for twenty years.

But an influx of buyers in the spring months has seen property prices rise again.

Many of the buyers were looking to move to Andorra full time to become resident, and take advantage of Andorra’s tax haven status.

Andorra is one of two of Europe’s prime tax havens, second only to Monaco.

Fifty years ago Andorra was one of Europe’s poorest countries, but now counts among the wealthiest, thanks mainly to her tax haven status, but also her ski industry, which has seen as many as ten millions visitors in a year – pretty impressive for a country with a 70,000 population.

Andorra has very similar fiscal benefits as Monaco, but property prices are around a quarter of Monaco’s.

Commenting on the turnaround, an Andorra property specialist says he is not surprised at the turnaround.

‘2007 started badly for Andorra. The lack of snow added up to a lack of visitors, and this in turn meant less buyers than normal, as some visitors like Andorra enough to buy a ski apartment. The pool of buyers was very limited between January and March, and the traditional good start to the year just didn’t happen’.

Andorra property prices are around a quarter of better known tax haven Monaco, attracting many high income earners from the UK and other European countries looking to reduce their tax bills.

Surprisingly perhaps for a tax haven, mortgages for a property are as available as many European countries, with rates around the same level. Up to eighty per cent of a property’s value is often agreed by the banks in Andorra.

Buying a property in Andorra is often seen as a route to residency, which entitles people to live in Andorra and benefit from her tax haven status.

To obtain residency in Andorra, applications need to be submitted in Catalan. A notarised copy of the applicants passport, birth certificate and a certificate of good conduct from the home country are submitted at the same time. Residency normally takes between three and six months to be given the stamp of approval by the Andorra residency office.