After, over 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I have witnessed, a variety of housing markets, home prices/ pricing, and market conditions! Since, for most, of us, the financial, asset value, of their house, is their single – biggest, most valuable, asset, the more one knows, the better – off, he will probably be! There is, not, only, one, factor, which impacts these conditions, but, rather, several, and, this article will attempt to, briefly, consider, examine, review, and discuss, 7 of these factors, and why/ how, they make a significant impact.
1. Inventory on Market: Examine the inventory, at the present time, because, it often, determines, how the Laws of Supply and Demand, might, impact, pricing, marketing, and market – type/ conditions! Obviously, if there are, fewer houses, for – sale, and a sufficient number of qualified, potential buyers, it will have a huge effect, on pricing!
2. Supply and Demand: Like, most economic principles, and situations, the Law of Supply and Demand, is significant, when it comes to, housing, and prices! When, there are few houses available, and more buyers, than sellers, we experience, what we refer to, as, a Sellers Market, which causes, price rises! When, the opposite occurs, we witness the inverse! When, there is a balance, there is, generally, more competition!
3. Mortgage Interest Rates: When, the cost, to borrow, is cheaper, such as what, we witness, today, the monthly costs, of home ownership, becomes lower, and we can achieve, more bang – for – the – buck! We, currently, are undergoing, record – low, mortgage rates, and, this has been a significant factor/ cause, in rising prices, at a quick pace! Eventually, at some – point, rates will rise, at least, to some degree, and, this will impact housing markets!
4. Consumer confidence: Much of this, relates, to the level of consumer confidence, both, at the current time, as well as, into the future! Since, buying a house, is, such a significant commitment, etc, buyers attitudes, become a major factor, in this regard!
5. Regional/ local: All real estate is local! This time – tested, adage, states, the actual conditions, generally, vary (sometimes, significantly, from area, to area! Especially, because of this recent, horrific pandemic, some regions, have become, far – more, desirable, etc, than others!
6. Schools and safety: Quality school systems, generally, positively, impact home pricing, but, may, also, have the effect, of causing, rising, real estate taxes, etc, which, in the longer – run, may, become an obstacle, etc! Overall, safety, in the area, and crime rates, are directly, related to pricing!
7. Real estate taxes: Remember, real estate taxes, are a significant component, of the cost of owning a home, of one’s own! In many regions, these are the major, funding vehicles, and pay, for items, such as schools, police, fire, maintenance, upkeep, etc.
The more you understand, these factors, the better prepared, you will be, to know, if a home, is worth the price, being asked (for you)! Will you become a wiser, home buyer?