Many factors affect the price, a specific house, might garner, if offered, for sale, on the real estate market. While there are both, emotional, as well as logical considerations, involved, four specific factors, generally, are the key components, which make the biggest differences, in what price, a specific home, might get, and offers, which will be presented. While there are always, competitive factors, especially how a specific property, compares, to others, for sale, in the local area, after more than a decade, as a Real Estate Licensed Salesperson, in the State of New York. I have come to believe, 4 specific factors, are most significant and relevant. With that in mind, this article will attempt to briefly consider, review, and discuss, these considerations, and why it’s important to proceed, with objectivity, and a realistic approach.
1. Overall economy, and consumer confidence: Obviously, the stronger the overall economy, and the more consumer confidence, as well belief, in a strong, sustainable employment/ job market, the more, people, might be ready, willing, and able, to pay, for a new home, of their own! Perceptions are often, far more essential, and relevant, than any other single factor/ factors!
2. Interest Rates and Real estate taxes: Overall interest rates, are the key, to mortgage rates, and obviously, the lower these rates, the lower, the monthly costs, for the homeowner. Even a somewhat minor, change in the rate, often, makes a significant difference, in the monthly expenses. In this mindset, one must consider, real estate taxes, also, because, they factor into, the overall costs, of home ownership, maintenance, etc.
3. Supply and demand: Real estate markets might be considered, Buyers Markets, Sellers Markets, and/ or neutral ones! When there are more buyers than houses on the market/ sellers, it’s a Sellers Market. When there are more sellers than those qualified buyers, looking, it becomes a Buyers Market, and when it’s somewhere, more balanced/ in – between, it’s a neutral one. Obviously, in most cases, the highest prices, occur in Sellers Markets, based on the economic concept of Supply and Demand!
4. Local market: Much of real estate, is local, in nature! Is your local area, in – demand? What are the strengths, and weaknesses? How does your area, neighborhood, location, etc, compare to other areas. Factors to consider include: safety; schools; convenience to transportation, shopping, entertainment; real estate taxes; etc.
The better one understands the actual value, as opposed to what, he wishes for, the more prepared, he will be, for the home buying, process. Will you commit to the tasks, discipline, etc?