4 Factors Which Impact Real Estate’s Future

Real Estate's Future

Since no one has a crystal ball, there will always be a significant degree of uncertainty when trying to predict and forecast future trends in the housing market.  Although past trends are essential to understand, we must also recognize we live in an evolving world, and everything, from how houses are marketed (especially the digital/ Internet considerations) to the extended, nearly historically low, mortgage interest rates, differ, from what has been witnessed, and experienced, in the past. With that in mind, this article will attempt to briefly consider, examine, review, and discuss four factors that might probably impact real estate’s future.

1. Supply and demand: One item, which has always been relevant, and still is, is the idea and concept of Supply and Demand. When there is more supply (available houses on the market than qualified buyers) than demand (buyers proactively seeking a home to purchase), home prices are stressed and, often, fall! On the other hand, when the converse exists, prices generally move upward. Housing prices, and pricing, are usually fluid, and either, Buyers’ Markets, or Sellers’ Markets, often come and go quickly and regularly!

2. Available funds: There are times when lending institutions follow more strict guidelines, and others when money is looser! This creates, times, when they require higher, or lower, credit requirements, to loan, and finance, a house. In addition, depending on overall conditions, there may be more or fewer qualified buyers. When money is readily available, lenders may require lower down payments, which means individuals often apply for a more significant amount of the loan principal.

3. Job security/optimism: The more, secure, potential buyers, are and feel, and whether, they believe there will be a prolonged, buoyant job/ employment market often, determines, how many people, consider themselves, potential buyers. When there are fewer buyers, this creates lower house prices, etc.

4. Local, regional, and national economic conditions: Economic conditions often dictate and determine the behavior and performance of the housing market! Although worldwide, and federal economic conditions, are significant, regional and local factors, strengths, weaknesses, trends, etc, are often even more relevant! When consumer confidence is high and potential buyers believe positive things will continue, the real estate market benefits!

Both professional real estate agents, as well as homeowners, and potential buyers, benefit when they better understand, as many relevant factors, as possible. Savvy buyers and sellers hire someone to help them understand the best courses of action and opportunities.

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