How are Home Sale Prices and Rental Prices Determined?
Real Estate values are determined by local, current market trends, defined by the law of supply and demand.
When the demand for property is high but property is scarce, prices skyrocket and it becomes a seller’s market. Scarcity causes prices to rise when there isn’t enough land or if there aren’t enough homes in a given area. Even if land is available on which to build more homes, the time it takes to construct them cannot meet immediate property needs, so demand will remain constant or rise.
When the number of available properties increases to glut the market, prices typically drop. You can usually expect a drop in prices when there is an over-supply of homes or land in a given area. You can’t move the overage to another area to keep prices stable.
Real Estate Is a Local Business
Many economic forces that might have little or no impact on other regions influence local markets and vice versa. Are local businesses hiring or downsizing? Angela understands the pulse of our local economy. Factors can greatly impact housing supply and demand might include an aging population, divorce rates, death rates, and the quality of the schools.
Most importantly the mood and sentiments of the buying public cannot be overlooked. Supply and demand don’t exist in a vacuum.
Trends in interest rates, national home prices, new housing starts, and many other economic indicators can influence real estate markets as well. These national events might not typically move real estate supply and demand directly, but they can render it less or more important.
Land Parcels Are Finite
Underlying all these influences are the basic fundamentals of supply and demand. You cannot fill a real estate supply shortage by manufacturing more units of land. It’s a finite supply, not a manufactured commodity. You might be able to create more units within a given space, such as condos or townhouses, but the land itself is unique and cannot be duplicated to accommodate a short supply.
Land & the Attached Real Estate Cannot Be Moved
When a shortage of land for homes exists in a given area, you can’t simply move in more land to alleviate the shortage. Real estate is where it sits. It will always be a local commodity influenced by local conditions.
In short, keep up with the big picture but narrow your primary focus to your region. Supply and demand in real estate will always be foremost a local issue.
Buying, Selling and Leasing in Changing Market Conditions
Tony Clark Realtors offers strategies for navigating every market. When working for our clients, our strategy is to guide and obtain the best deal, whether it’s a buyer’s market or a seller’s market. The key to success in buying and selling a home is simple: Work with a Realtor you trust, like Tony Clark Realtors. Tony Clark Realtor works from the heart of a teacher, is key to coming out ahead. From negotiations to inspections to title and closing, a Tony Clark Realtors works with you through every step
Tony Clark Realtors offers expertise to home buyers, home sellers, and property owners. A multi-generational real estate brokerage, our culture is deeply rooted in our Owensboro Kentucky community, with service based on The Golden Rule. We strive to treat everyone with the best customer service, and create a positive experience by communicating early, often and effectively. Trusted by many property owners to manage their rental properties, we offer the largest portfolios of properties for rent least available in the area. When you choose Tony Clark Realtors® for your real estate needs, you can have peace of mind as to the high value and quality of service you’ll receive.