When you read or watch the news about the real estate market, it may seem reasonable to make the assumption that the information applies equally to your street or community.
But, that isn’t always true.
In fact, the characteristics of your local real estate market can differ in many respects from the regional or national market.
Say the regional real estate market is most active during certain months of the year. That might be true of your neighbourhood, too. But, there may also be some caveats. If, for example, buyers are eagerly awaiting listings to come up in your community, then that micro market might heat up faster than other areas in the region.
Knowing how your local market works and how it differs from the larger regional market is crucial when selling. It helps you decide when it’s best to list and helps to ensure your home sells quickly and for a good price. That’s a strategic advantage.
Understanding the local market also helps when buying. Imagine acting only on regional or national market statistics without knowing the unique market characteristics of a neighbourhood you’re hoping to buy into. You could end up missing opportunities. You don’t want that!
So, pay attention to the local real estate market. Get the latest information on what’s happening. Here are four factors that drive real estate to watch out for:
- Demographics: Demographics are the sets of data that reflect the composition of a population, such as age, race, gender, income, etc. Shifts in the demographics of a nation can have a large impact on real estate trends for many years. These statistics are often overlooked factor that can affect how real estate is priced and the properties in demand.
- Interest Rates: Interest rates have a major impact on the real estate market. If you're considering buying a home with a mortgage, use a good mortgage calculator to see how different rates of interest can affect the purchase price. Changes in interest rates can greatly influence a person's ability to purchase a property. That's because the lower the interest rate, the lower the cost of a mortgage. That's great for borrowers, but it can also create greater demand for real estate, which then pushes prices up. As interest rates rise, the cost of a mortgage increases, thus lowering demand and real estate prices.
- The Economy: Another factor that affects the real estate value is the overall health of the economy, as measured by indicators such as the GDP, employment data, manufacturing activity, the prices of goods, etc. In general, when the economy is low, so is real estate.
- Government Policies & Subsidies: Legislation is also a factor that can have an impact on the property market. Tax credits, deductions, and subsidies are some of the ways the government can temporarily boost demand for real estate. Being aware of current incentives can help you figure out changes in supply and demand.
For more information about your local real estate market, contact Jeremy Osborne.