It is very interesting to know how real estate prices can fluctuate up and down over the years. If you are thinking to invest in real estate then you should be aware of these factors. Let’s discuss 4 key factors that drive the real estate market with Nima Bendavood.
Demographics
Demographics is a broad term that refers to the population of any given geographic area. Demographic factors are important for real estate investors because they affect home prices, rental rates, and the number of people who want to live in an area. Population growth is one of the most significant demographic factors that drive the real estate market. The more people there are in an area, the greater demand there will be for housing and homes.
The increase in real estate prices is very much related to the growth of the population. The more people living in a particular area, the more housing that will be needed. This is because the demand for housing is always increasing. The real estate market has been growing at a rapid pace and this has increased the need for more houses to be built as well as purchased. If you want to invest in real estate then you should know about this factor so that you can make an informed decision on whether or not it’s worth your time and money.
Interest Rate
Nima Bendavood: Interest rates impact the demand and supply of money in an economy. When interest rates go up, people save more money as they earn more interest from their savings accounts. This causes a fall in consumption and investment which results in less demand for real estate. On the other hand, when interest rates go down, people spend more money on buying houses or cars as they get higher returns from their investments. This increases the demand for housing units thereby driving up housing prices. Similarly higher interest rates mean higher and less affordable loan payments which could lower home values. On the other hand, lower interest rates mean more affordable payments and higher loan qualification which could increase real estate values.
Interest rate factors that drive the real estate market are a very important topic. It’s not only about the interest rates but also about other things like how much money you can borrow, what kind of loan are you getting and where to get it from.
The Economy
The economic factors that drive the real estate market are the most important factor that determines whether a person will buy or sell their home. This cycle has been around since the beginning of time, and it still exists today. Some people believe that this cycle is more pronounced than in previous years. This economic cycle affects every aspect of our lives including our jobs, income levels, spending habits, and even how much we save for retirement.
Government Policies or Subsidies
Nima Bendavood says the real estate market is driven by government policies or subsidies that drive the demand for housing. Most governments have a policy of encouraging home ownership such as through government loans with specials rates and pricing. This policy has led to an increase in the demand for housing because people are drawn to buy homes they can afford. As a result, the prices of houses rise as there’s more demand.