If we learn from the past, in a meaningful way, we might better understand, the history of land should teach us, the housing markets, are, often, cyclical! There are up – markets, and down, ones, also as periods, with a greater degree of balance, between these two. Most have heard references to buyer’s markets, also as seller’s markets, yet, it seems, people still overreact, to changing conditions, etc. It would, therefore, be beneficial, to raised understand, a number of the explanations, and driving forces, involved, in what makes these cycles occur. thereupon in mind, this text will plan to, briefly, consider, examine, review, and discuss 5 important factors, and a few of the potential impacts and ramifications, involved.
1. Interest rates: one among the driving forces, within the housing markets, is interest rates. These could also be, market-driven, supported economic conditions, manipulated (for political purposes, etc), or, specific, to mortgage rates. After all, when one pays lower rates, for a mortgage, we generally witness, greater buyer demand, because, it’s possible, to get, more bang – for – the – buck! Lower rates mean, one gains the power to shop for more houses, for his dollars, because the prices of his monthly carrying charges, is reduced. However, throughout history, these have lowered, and raised, and, often, dramatically impact the general industry!
2. Overall economy: an honest economy brings a few greater degree of confidence, because people, seem to believe, it is a blast to buy! On the opposite hand, when there’s an economic concern, it affects the important estate industry, in a negative manner!
3. Consumer/ job confidence: the higher the general, job security, and consumer confidence, the higher the housing market, responds. On the opposite hand, many of us are cautious and anxious, during, either, actual, or perceived, downturns, or, even, potential ones, and take an opportunity, from trying to find a house. The laws of supply, and demand, will either raise or lower prices, when either, sellers, or buyers, are in larger supply!
4. Pricing/ affordability: There’s often some extent of diminishing return when it involves rising prices! When this rises too quickly (or perceived as, houses costing too much), many of us perceive them, as unaffordable, and stand back, from the housing market. Obviously, which will cause a price correction!
5. land taxes: Areas with higher land taxes, often, have the best market swings, because, especially, since the tax legislation, enacted in 2017, which capped deductions, to $10,000, these houses, become tougher to plug , and sell!
The more you understand, and learn from the past, the higher you’ll be prepared for future fluctuations! Will you become a sensible homebuyer?
Richard has owned businesses, been a COO, CEO, Director of Development, consultant, professionally run events, consulted to thousands, conducted personal development seminars, for 4 decades, and a RE Licensed Salesperson, for a decade+. Rich has written three books and thousands of articles. Website: http://PortWashingtonLongIslandHouses.com and just like the Facebook page for real estate: