A solid foundation of knowledge can be built that will help you better understand what you need to know about real estate. When you present yourself with this knowledge you will be ensuring that you are not making one of those rookie mistakes that could spell the end of your career in real estate as well as your credit rating. Below we are going to explore one facet of this knowledge, real estate prices. We hope that you will walk away with a better understanding of how real estate prices affect investing.
For the property prices to go up you firstly need plenty of eager buyers. One implication of the fact that house loans have to be made when anyone wants to buy property, is that there will be many buyers who will go rather for houses with interesting mortgage products that includes low nominal rates. In accordance with the same source, a decrease of just 1% in the nominal interest rate is equal to 1/2% to 1% of property prices increase after 1 year. Buyers are also extremely sensitive to any sort of drop in the nominal interest rate and as a result property prices settle.
In 1987, the Journal of Real Estate Research published an article entitled "Pricing Strategies and Residential Property Selling Prices," which presented evidence showing that the pricing strategies used for residential properties actually colored the perceptions of buyers regarding the quality and the worth of the property in question. This effect, called price influence, is based on the idea that consumers often base their assumptions about quality and worth on the listed price of an object. For instance, consumers exhibit a trait consumer researchers call "price reliance." This is the tendency to believe that things that cost more are worth more, and that the reverse is true as well.
Canada, with a total population of just over 33 million, is a much smaller real estate market. It has not experienced the same turmoil as the United States because of much stricter banking and lending laws. However, the Canadian real estate market has declined both in the total number of home sales and in average prices.
The sales price is, of course, a different animal. As the name suggests, the price is based on a more factual set of information. It is not the amount the home in question sold for. Since it is still on the market, that hasn't happened yet. Instead, it the price that comparable homes in the area have sold for. This figure represents the realistic, real time figure that the home in question can sell for given all the circumstances then present.
The current sale price of similar homes will give the realtor the information they are looking for to be able to fairly price your home. The cost of the homes that did not sell could likely be too high for buyers in your area, and that will be taken into consideration by your realtor when the value is placed on your home.
National home cost continue to fall under the pressure of the economy. There has been a decrease in the home values of approximately 80% of Metropolitan communities across America. The new current national median home cost is $177,900 which is 11% below the national median price during the third quarter of last year. According to the National Association of Realtors, one-third of current home sales are for distressed properties, many of which have gone through foreclosure or are short sales.
Home sales have however rose 11.4% across the nation in the third quarter which accounts for 5.3 million housing units. Lawrence Yun, the chief economist for the NAR, attributes the increase in home sales to the very attractive federal tax credit. The extension of the tax credit along with other changes that benefit previous home owners and home owners in higher income brackets, may have also contributed to the increase in home sales. Yun also believe that the tax credit will continue to offset the rapid amount of foreclosers on the market but enticing buyers.
For the property prices to go up you firstly need plenty of eager buyers. One implication of the fact that house loans have to be made when anyone wants to buy property, is that there will be many buyers who will go rather for houses with interesting mortgage products that includes low nominal rates. In accordance with the same source, a decrease of just 1% in the nominal interest rate is equal to 1/2% to 1% of property prices increase after 1 year. Buyers are also extremely sensitive to any sort of drop in the nominal interest rate and as a result property prices settle.
In 1987, the Journal of Real Estate Research published an article entitled "Pricing Strategies and Residential Property Selling Prices," which presented evidence showing that the pricing strategies used for residential properties actually colored the perceptions of buyers regarding the quality and the worth of the property in question. This effect, called price influence, is based on the idea that consumers often base their assumptions about quality and worth on the listed price of an object. For instance, consumers exhibit a trait consumer researchers call "price reliance." This is the tendency to believe that things that cost more are worth more, and that the reverse is true as well.
Canada, with a total population of just over 33 million, is a much smaller real estate market. It has not experienced the same turmoil as the United States because of much stricter banking and lending laws. However, the Canadian real estate market has declined both in the total number of home sales and in average prices.
The sales price is, of course, a different animal. As the name suggests, the price is based on a more factual set of information. It is not the amount the home in question sold for. Since it is still on the market, that hasn't happened yet. Instead, it the price that comparable homes in the area have sold for. This figure represents the realistic, real time figure that the home in question can sell for given all the circumstances then present.
The current sale price of similar homes will give the realtor the information they are looking for to be able to fairly price your home. The cost of the homes that did not sell could likely be too high for buyers in your area, and that will be taken into consideration by your realtor when the value is placed on your home.
National home cost continue to fall under the pressure of the economy. There has been a decrease in the home values of approximately 80% of Metropolitan communities across America. The new current national median home cost is $177,900 which is 11% below the national median price during the third quarter of last year. According to the National Association of Realtors, one-third of current home sales are for distressed properties, many of which have gone through foreclosure or are short sales.
Home sales have however rose 11.4% across the nation in the third quarter which accounts for 5.3 million housing units. Lawrence Yun, the chief economist for the NAR, attributes the increase in home sales to the very attractive federal tax credit. The extension of the tax credit along with other changes that benefit previous home owners and home owners in higher income brackets, may have also contributed to the increase in home sales. Yun also believe that the tax credit will continue to offset the rapid amount of foreclosers on the market but enticing buyers.
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