4 Factors Which Impact Real Estate’s Future

Since no one has a crystal ball, there will always be, a significant degree of uncertainty, when it comes to trying to predict, and forecast, the future, and trends, when it comes to the housing market, etc! Although, past trends, are significant, and important, to understand, we must, also recognize, we live in an evolving world, and, everything, from how, houses are marketed (especially, the digital/ Internet considerations), to the extended, nearly, historically low, mortgage interest rates, differ, from what has been witnessed, and experienced, in the past. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 4 factors, which might probably, impact real estate’s future.

1. Supply and demand: One item, which has always been relevant, and still is, is the idea and concept, of Supply and Demand. When there is more supply (available houses on market, than qualified buyers), than demand (buyers, proactively, seeking a home, to purchase), home prices are stressed, and, often, fall! On the other hand, when the converse, exists, prices, generally, move upward. Housing prices, and pricing, are, generally, fluid, and, either, Buyers Markets, or Sellers Markets, often, come and go, quickly, and regularly!

2. Available funds: There are times, when lending institutions, follow, more strict guidelines, and, others, when money is looser! This creates, times, when they require higher, or lower, credit requirements, in order to loan, and finance, a house. In addition, depending on overall conditions, there may be, either, more, or fewer, qualified buyers. When money is more – readily available, lenders may require lower downpayments, which, means individuals, often, apply for a greater amount of the loan principal.

3. Job security/ optimism: The more, secure, potential buyers, are, and feel, and whether, they believe, there will be a prolonged, positive job/ employment market, often, determines, how many people, consider themselves, potential buyers. When there are fewer buyers, this creates, lower house prices, etc.

4. Local, regional, and national economic conditions: Economic conditions, often, dictate, and determine, the behavior and performance of the housing market! Although, world – wide, and national, economic conditions, are significant, regional and local factors, strengths, weaknesses, trends, etc, are often, even more relevant! When consumer confidence is high, and potential buyers, believe, positive things, will continue, the real estate market benefits!

Both, professional real estate agents, as well as homeowners, and potential buyers, benefit, when they better understand, as many relevant factors, as possible. Smart buyers and sellers, hire, someone, who will help direct them, to understand, the best courses of action, and opportunities.

4 Factors Which Impact Real Estate Prices

Many factors affect the price, a specific house, might garner, if offered, for sale, on the real estate market. While there are both, emotional, as well as logical considerations, involved, four specific factors, generally, are the key components, which make the biggest differences, in what price, a specific home, might get, and offers, which will be presented. While there are always, competitive factors, especially how a specific property, compares, to others, for sale, in the local area, after more than a decade, as a Real Estate Licensed Salesperson, in the State of New York. I have come to believe, 4 specific factors, are most significant and relevant. With that in mind, this article will attempt to briefly consider, review, and discuss, these considerations, and why it’s important to proceed, with objectivity, and a realistic approach.

1. Overall economy, and consumer confidence: Obviously, the stronger the overall economy, and the more consumer confidence, as well belief, in a strong, sustainable employment/ job market, the more, people, might be ready, willing, and able, to pay, for a new home, of their own! Perceptions are often, far more essential, and relevant, than any other single factor/ factors!

2. Interest Rates and Real estate taxes: Overall interest rates, are the key, to mortgage rates, and obviously, the lower these rates, the lower, the monthly costs, for the homeowner. Even a somewhat minor, change in the rate, often, makes a significant difference, in the monthly expenses. In this mindset, one must consider, real estate taxes, also, because, they factor into, the overall costs, of home ownership, maintenance, etc.

3. Supply and demand: Real estate markets might be considered, Buyers Markets, Sellers Markets, and/ or neutral ones! When there are more buyers than houses on the market/ sellers, it’s a Sellers Market. When there are more sellers than those qualified buyers, looking, it becomes a Buyers Market, and when it’s somewhere, more balanced/ in – between, it’s a neutral one. Obviously, in most cases, the highest prices, occur in Sellers Markets, based on the economic concept of Supply and Demand!

4. Local market: Much of 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 to other areas. Factors to consider include: safety; schools; convenience to transportation, shopping, entertainment; real estate taxes; etc.

The better one understands the actual value, as opposed to what, he wishes for, the more prepared, he will be, for the home buying, process. Will you commit to the tasks, discipline, etc?