After watching the real estate market, you will start to notice that it has cycles that are predictable. These cycles contain “booms” and “busts”. Booms are the time that home prices in the real estate market soar, and busts are the time when these prices fall. However, these home prices are still controlled by demand and supply forces. When there are too many properties for sale in the real estate market, it causes busts to occur. The opposite is true for booms, which occur when there are not enough properties on the market. These supply and demand dynamics can be influenced by other factors such as political and economic factors as well as social factors. Keep in mind that the real estate market is in a state of continuous change and these factors should just be used as a guide.
Political factors that influence real estate prices
Political factors can influence property prices on the market. For example, with an upcoming government election, the uncertainty that comes with this time can cause a bust. People want to be sure that real estate policies are not changing before choosing to buy more property.
Economic factors that influence real estate prices
Economic factors can also influence real estate prices on the market. The availability of easy credit and improved economic performance can cause a boom. This improved economic performance allows for people to get more money. After people are able to make more money, many decide to invest in the real estate market. This process raises demand and, in turn, raises home prices.
Social factors that influence real estate prices
Even social factors can influence property prices. Population growth combined with improved economic performance can lead to an increased demand, which leads to a boom in the real estate market. Another social factor that influences home prices is a rise in crime rate in any given area. The increase makes people cautious about living in that area, which can lead to a decrease in demand or a bust.
Keep in mind that the real estate market is in continuous change. When buying or selling property, you should not expect these conditions or influences to hold forever. For more information on buying and selling homes, contact Elite Real Estate Group in Amarillo. Give us a call today at (806) 337-0883 or Contact Us via email. You can also view our listings to see the homes we currently have available in the Texas Panhandle area.