4 Factors That Affect Real Estate Prices
Many factors affect the price a specific home could fetch, if offered, for sale on the real estate market. While there are both emotional and logical considerations involved, four specific factors, in general, are the key components, which make the biggest difference, at what price, a specific house, you could get and the offers, which will come. . While there are always competing factors, especially how a specific property compares to others for sale in the local area, after more than a decade, as a licensed New York State real estate seller. I have come to believe that 4 specific factors are the most significant and relevant. With that in mind, this article will attempt to briefly consider, review, and discuss these considerations, and why it is important to proceed, with an objective and realistic approach.
1. General Economy and Consumer Confidence: Obviously, the stronger the overall economy, and the more consumer confidence, and belief, in a strong and sustainable job/job market, the more people will be ready, willing and able to pay for a new home, than his! Perceptions are often far more essential and relevant than any other individual factor or factors!
2. Interest Rates and Real Estate Taxes: General interest rates are the key to mortgage rates, and obviously the lower these rates are, the lower the monthly cost to the homeowner. Even a minor rate change often makes a significant difference in your monthly expenses. In this mindset, real estate taxes should also be considered, because they take into account the overall costs of home ownership, maintenance, etc.
3. Offer and demand: They can be considered real estate markets, buyers markets, sellers markets and/or neutral markets. When there are more buyers than houses on the market/sellers, it is a Seller’s Market. When there are more sellers than those qualified buyers, looking, it becomes a Buyers Market, and when it is somewhere, more balanced/in the middle, it is neutral. Obviously, in most cases, the highest prices occur in the Sellers’ Markets, based on the economic concept of Supply and Demand!
4. Local market: Much of the real estate is local, in nature! Is your local area in demand? What are the strengths and weaknesses? How does your area, neighborhood, location, etc. compare? with other areas? Factors to consider include: security; schools; convenience of transportation, shopping, entertainment; real estate taxes; etc
The better you understand true value, as opposed to what you want, the more prepared you will be for the home buying process. Will you commit to chores, discipline, etc.?