Understanding property appreciation
Home prices are continually changing. Over a long enough period of time, property values , for the most part, go up. But, of course, there is always a certain amount of risk in real estate.
When your house appreciates you have a larger asset to borrow against, and you get a larger profit when you sell. Property values in move up and down for various reasons, so how can you be sure what you're buying right now won't depreciate the day after you close? Choosing a REALTOR® in who knows the factors that drive local prices is the most important part.
A lot of people think that the economy is the greatest factor affecting real estate appreciation. After all, there are numerous factors on a national level that influence your home's value: unemployment, mortgage rates, the stock market, and more. However, your property's value and the elements that play the most significant role in its appreciation are specific to the local economy and housing market.
Access to services - People typically want homes in the districts with the most convenient places we go often or everyday, such as our jobs and schools. So those regions usually appreciate, or hold their value consistently, year to year.
Recent sales - Your REALTOR® should provide you with information on the recent real estate sales in the areas that you're asking about. You'll want to know average time on market, selling versus listing price and more.
History of appreciation - In the past 5 to 10 years, have home prices risen or declined? Does location or affordability affect how desirable the neighborhood is considered?
Economic factors - Have businesses moved into or away from an area? Are local businesses hiring? Is there a nice mix of jobs in an area, or does it count on just one industry? These items play a role.