Housing prices are constantly changing, which can make both buying and selling a home more complicated. While it’s difficult to predict future changes, it’s important to understand the key factors that affect the housing market and home prices. Here are the five major things that affect housing prices:
The overall health of the economy is a major influence on housing prices. While made up of myriad factors, the “health” of the economy can usually be determined by employment data, manufacturing data and prices of goods. As the economy flourishes, housing prices increase. Likewise, if the economy is suffering, prices often decrease.
The fluctuation of supply and demand affects goods and services, and property is no exception. Because physical property is a finite resource, supply and demand can become extremely important in densely populated areas. The differences between a buyer’s and seller’s market is the amount of demand compared to the amount of actual housing inventory.
If the Federal Reserve changes interest rates, mortgage lenders have to adjust accordingly. This results in a different interest rate on your mortgage or loan. Even though the change may be less than a tenth of a percent, it can make a tremendous difference in housing prices. As mortgage rates increase, many would-be homebuyers cannot afford higher priced homes. On the flip side, lower mortgage rates can encourage more buyers to enter the market, which affects pricing through supply and demand.
The location of a home affects its price immensely. There are multiple factors in a location that can affect pricing, such as specific neighborhoods, highways, specific attractions or cultural interest, hospitals and schools. Home prices are higher in areas with rapid growth and lots of commercial activity. Some other location-based variables that can affect the price of a home include crime, healthcare access and proximity to industry.
Understanding the variables at play in the overall economy will help you navigate the housing market with confidence. Keep these factors in mind during your home search or selling process to stay up-to-date on what affects housing prices.
As a Real Estate Professional my number one goal is to provide exceptional service that leaves my clients happily satisfied. I do this with my commitment to helping you buy or sell your home with the highest level of expertise in your local market. This also means helping you understand each step of the buying or selling process. I do not sell houses, I simply guide my clients through a predetermined series of events to ensure a smooth stress free Real Estate experience. You can count on me to always do what's in your best interest, as I pride myself on being honest, trustworthy, and knowledgeable in the Real Estate market. I understand how important it is to get the best offer for your property, therefore I make it my responsibility to help you achieve these goals. Whether you are buying or selling your primary residence, a second home, investor property, a first time buyer, or just relocating to a new neighborhood, I can help make your home-ownership dreams come true. (First Time Buyer Specialist) (Certified Probate & Trust Specialist)
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