It is unrealistic, silly and potentially, harmful, to your best interests, to look at, or consider real estate, in a vacuum. Many factors impact this market, on a broad basis, in addition to the many personal considerations, one should consider. This article will briefly, attempt to evaluate, consider, and discuss, some of these economic factors, including the economic ramifications, of market conditions, job – related, interest rates, etc. Failure to consider these risks wasting certain qualified buyers’ time, as well as sellers’ potential price, and how long getting one’s home sold, might take. This will attempt to consider these factors, in an easy – to – understand, manner.
1. Market conditions: Why is there, either, a buyers or sellers market, and will a particular trend continue, and for how long. The easiest explanation is often, supply and demand, but that does not explain, why these conditions exist. Is there something, in the national, or international economy, which is driving specific market conditions? Some considerations include the public’s faith in the strength of the present economy, and whether they perceive, it will continue, and for how long. Another is the inflation rate, and perceptions of its impact.
2. Job – related: How strong and growing is the present job market? Are incomes rising, enough, to drive prices up? What price range and social group, does a particular area, appeal to? How close to transportation, how long a commute, and whether it’s convenient, affect prices. Similarly, for many potential buyers, the most important consideration is the community’s school system, and what it offers. Many factors go into determining pricing, within a local area.
3. Interest rates: Since, the vast majority of buyers, use a mortgage, monthly carrying costs, which includes principal repayment, mortgage interest, real estate taxes, and escrow, are major issues. Relatively, small rises, in the rate of interest, affect, both, the amount one qualifies for, as well as their monthly payment. It also makes a huge difference, in determining, whether to use a fixed, or adjustable, type.
Obviously, someone must look for, and purchase a home, which meets or exceeds their needs and dreams, while being affordable, and making one avoid the House – rich, home – trap. The better informed, educated, attentive, prepared, and realistic, a potential buyer, the better his eventual results. Similarly, homeowners must understand their local market, and proceed with realistic expectations.