Real estate is a key component in determining someone’s wealth. In the same instance, it is normally considered a solid investment. Before making the decision to invest and/or own your own property or even to sell, it’s important to evaluate how the real estate market is performing.
The results could show you if it’s a good time and if you’ll be purchasing or selling for fair market value. There are a few key factors that drive the real estate market that you should evaluate.
Interest rates. If you’re buying a property with a mortgage, start by researching interest rates using a mortgage calculator. Interest rates will vary week by week, but it will give you a good idea on the demand for real estate. The lower the interest rate, the lower the cost to get a mortgage will be. Lower interest rates create a higher demand, which increases real estate prices.
The economy and stock market. The overall health of the economy plays a big part on the real estate market. Indicators like employment data, the price of goods, the stock market, etc. typically measure the health of an economy. Most participate in the stock market in at least a small way so it impacts the majority of potential homeowners.
Ability to secure a loan. If the economy is weak, buyers who have a low cash flow and fair credit will find it difficult to get a loan. If the economy is strong, lenders will loosen standards and the real estate market will benefit.
Demographics. Things like age, race, gender, income and population growth can affect how property is priced and the types of properties that are in demand. Major shifts in demographics, like the baby boomers generation who were born between 1945 and 1964, can significantly influence the real estate market. Their retirement is being noticed now and will continue to be noticed for years to come.
If you have a goal to purchase a home or make a business investment in real estate, make sure you research and analyze these factors and the impact they are currently having on the real estate market.
United Country Real Estate is the nation’s largest integrated network of traditional and auction real estate professionals. Whether you’re looking for your next home or an investment property, we can help you from start to finish. Visit our website to find an agent near you at www.UnitedCountry.com.