The real estate market fluctuates just like other markets. A home priced at $500,000 will not necessarily cost the same in a few months – the price can increase or decrease. Players in the real estate market need to anticipate such fluctuations given that even a small percentage price increase or decrease amounts to thousands of dollars.
Below are indicators you can use to monitor the real estate market.
GDP
The gross domestic product (GDP) is the total economic output of a country over a given period, such as a year or quarter. As such, the GDP measures the financial health of a country. A low GDP (compared to previous years) means the country's economy is unhealthy, and the reverse is true.
A growing GPD shows that many people (individuals and corporates) have the money to buy real estate properties. The increased demand can lead to high property prices. Properties don't spend a long time on the market in a strong economy. Developers also have money to construct and put homes on the market in a strong economy.
Employment Data
Employment data provides insight into several aspects of employment, such as employment and unemployment levels, job growth rates, and performance of different employment sectors. Employment data is critical since people need jobs to earn money to buy houses. In addition, mortgage companies also use employment status when evaluating loan applications.
Moreover, some job market sectors influence the real estate market more than others. The critical sectors often pay high salaries and affect other job sectors. Thus, tracking employment data can help you gain further insight into the real estate market.
Interest Rates
Like other indicators, interest rates are indicators and can influence the real estate market too. Many consider interest rates critical when comparing mortgage quotes or evaluating whether to buy a home. Property demand, or lack of it, affects the days properties spend in the market and the developers' motivation for putting more properties on the market.
A high-interest rate is not only a turnoff but can also prevent you from buying a property (due to affordability) even if you are ready to pay the high rate. On the other hand, low-interest rates make mortgages more affordable and encourage people to buy properties.
A single indicator might not give you adequate insight into the real estate market. You must consider multiple factors to get the real picture. Real estate professionals understand these issues; contact one near you to learn more.
Share20 March 2023
When I started looking for a new home, I realized that there were a few things I needed to be careful about. For instance, I really needed to focus on finding a home that would appreciate in value, so I began thinking about investing in the right property. After quite a bit of research, I was able to find a great neighborhood that had a big support system for my family. After we found a house we loved, we worked with a real estate agent to procure it, and it was really nice to feel like we belonged somewhere. Read this blog about ways to find amazing pieces of real estate the first time around.