Many are paying more attention, to the prices, houses are being, sold - for, today, than, in most previous periods, because, in the past year, home pricing, has risen, at, or near, record paces, etc! The reality is, although, for most Americans, the value of their house, is their single - biggest, financial asset, many try to over - simplify, the reasons, for why, the residential real estate market, reacts, as it does! After, over 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I recognize, at least, 5 factors, contribute to market prices, and pricing. With, that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, what these are, and why it matters.
1. Supply and demand/ Inventory: As, with most economic conditions, and markets, the concept of Supply and Demand, is, perhaps, the most, consistently, relevant one! Traditionally, many think of these conditions, as creating, either a Sellers, Buyers, and/ or, neutral market, based on the relationship, between the number of houses, for sale (inventory), and qualified, motivated buyers! For, some time, we have seen far - more potential buyers, than inventory, and, this resulted in rising prices! It seems this appears to be balancing, somewhat, with buyer - demand, apparently, dropping, somewhat, while, inventory, slightly, increasing, which should create a market - leveling, etc!
2. Mortgage interest rates: We have witnessed, a prolonged/ extended period, where mortgage interest rates, have been, at, or near, record - lows! This means, more people, qualify for mortgages, as well as, making, monthly mortgage payments, much lower! When, this occurs, and the public perceives it, as so, the result is rising home prices!
3. Overall economy/ reality, and perceived: When, we are experiencing, a stronger economy, and/ or, the public (especially, potential buyers), perceive it, as so, real estate prices, react, by increasing!
4. Local market conditions: There is a philosophy, which states, All real estate is local, and, although, it may not be, as dramatic, as that, it is true, that, some markets, out - perform others, for a variety of reasons, including: the local economy; desirability; perceptions; and other variables/ issues!
5. Specific house: What makes some houses, more desirable, and attractive, than others? When, considering a specific house, to become your home, consider, the specific property, and building, as well as the neighborhood, and the positives and negatives, related! How a particular place, compares, to others, determines the price, obtained!
The better, you know, and understand, the factors, determining home pricing, the smarter, you might proceed, forward! Are you, prepared to become your personal best friend?
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