Understanding home prices
Property values are forever in flux. Over a long enough period of time, property values typically go up. But there is always a certain amount of risk in real estate, of course.
When your house appreciates you have more resources to borrow against, and you'll generate a higher profit when you sell. There are different reasons why property values go up and down. So, how can you be sure what you're buying now will appreciate over time? The most important thing is that you go with a REALTOR® who is familiar with the factors that drive local prices.
The economy is believed to be the most crucial factor impacting real estate appreciation. After all, interest rates, unemployment, business growth, government programs and some other national factors have a noticeable impact on your home's value. But the most significant things that determine your home's value are particular to the local economy and housing market.
Location in a community - Convenient access to schools, work and amenities like shopping, restaurants and entertainment is a priority to many buyers and will greatly influence home values. So these areas typically appreciate, or carry their value consistently, year to year.
Recent home sales - You should receive figures on the recent real estate sales in the districts that you'd like to live in from your agent. You'll need to know things like how long a house stays on the market and listing price as opposed to selling price.
History of appreciation - In the last 5-10 years, have property prices gone up or down? Does location or affordability affect how desirable the community is thought to be?
Economic factors - Have companies moved into or away from an area? Are local companies hiring? Is there a nice combination of business in an area, or does it rely upon just one industry? Each of these items plays a role.