What trends are important for real estate market projections?
Whether you are an investor or simply want to maximize your personal bottom line by buying a home with the greatest possible potential return, understanding market factors and projections for an area can make a big difference in your approach to real estate.
1 All real estate is local
Whatever you may hear on the media is important to consider, but there are exceptions to every rule. Get to know what is taking place in a local community: Is there a new mall being built up the road? Now might be the perfect time to buy while it is still affordable. What about the construction of a major road or a new mega-employer coming to town? Even in the worst real estate markets, there is money to be made by those who have their pulse on a local market.
2 Understand demographic trends
For example, Baby Boomers are retiring, so understanding where they are going and what they are searching for can provide a great deal of insight into emerging markets. States like Florida are expanding faster than the infrastructure can keep up — a ripe opportunity for those able to capitalize on the trend.
3 Vacation homes
Tourism, a distributed lifestyle and a trend toward rest and relaxation assure a constant demand for low maintenance homes in places that allow people to unwind and get away from it all.
4 The value of the dollar
A falling dollar impacts real estate in two major ways. First, it makes American homes and real estate even more desirable to foreign buyers or investors because buying here is affordable. Urban areas as well as vacation or luxury homes can dramatically benefit from the exchange rate. Secondly, a falling dollar is associated with price inflation for assets and commodities. Housing, building supplies and even the cost of transportation will increase in response to price inflation causing the overall cost of a home to increase.