3 Factors that Affect the Real Estate Market

They say real estate is a volatile industry. There are a number of uncertainties and you can never truly predict where it will land. Whether you are buying a home or selling property, there is always a certain level of risk involved. However, as real estate experts, we believe that this uncertainty comes from the fact that real estate market is dependent on a number of factors. Anyone well aware of these factors can very well make predictions that are correct to a great extent.

While it takes years of experience to properly gauge these factors and their impact, we would like to share the 3 most significant ones with you so that you can have a preliminary idea of how the real estate market works.

The Economy – It may be a broad term but economy determines the power of people to buy commodities. When the economy is weak, unemployment and inflation rates rise making a majority of people unable to afford property.

Demographics – From baby boomers who caused the real estate boom in the first place, to today’s generation, the demographic factors such as age, race, and gender play an important role in real estate trends. For instance, an area with a majority of retirees, there is a bigger chance most people will sell their existing homes and buy vacation properties.

Politics and Policies – Government policies and political activities are significant drivers in the real estate industry. Political tension can often topple the market upside down, while a great policy can send things in a positive direction.

These three factors more or less impact everything, from prices to mortgage rates. If you want a clear idea of how these indicators can impact your decision of buying or selling property, give us a call.