Here is one very important factor; the cost of lumber see insert report from Builder online, below.
Cost of supply and demand drives the prices up and down. For Real Estate pricing starts with something as small as a nail , the cost of lumber, to price of land, over to the cost of employees, Insurance, Equipment that assist in Home construction. Just to mention a few things very tiny fraction of all the cost that is required to build a home.
- Real Estate Market and the Economy. The more we understand that the two work hand in hand the better our chance of not repeating the next major recession. As mentioned above, what drives this factor is Employment data, manufacturing activities. We also control the Resale Market and it’s pricing. Not enough homes for sale result in higher sales prices, because the demand is higher than our supply. This in turn lets our Sellers receive a higher gain. As long as we do not outprice our self, that in turn will be good things. What helps our buyer’s purchase in a market such as this; lower interest rates to afford a higher price.
- Interest rates. The economic factor comes now into play, interest rates are low and buyers can afford not just a home but a higher priced home. So the key is to keep everything in perspective. Unfortunately not enough homes on the market bring the prices up. Too many homes on the market bring the price back down. Mhhhhh possible recession. So, we have to be smart in every market.
- Demographics. That is “all of us? Regardless of whom we are or where we are. It is our behavior that drives markets in the United States or abroad. We see opportunities and we make decision off of those. Moving away from snow to a warmer climate. Moving from an Island to the Desert. Moving from the Desert to a Beach. Employment opportunities, etc. Life styles. Access to health, access to fun, access to life.
- Transportation. Again this is “all of us,” what is it that we need, Cars, Busses, Limos, Trains, Planes, vehicles above ground , vehicle below ground. How fast can we get from point A to point B?
- Education. Yes, you guessed it again it is “all of us” We need good education, from Day care, to Preschool to Elementary Schools to Middle Schools to High Schools and of course we need higher Education, – the Universities, which brings us back around to the Economy again.
- Health. We need a good medical system, great doctors, good research centers, we need take care of our health two ways, the young and the elderly, because we need different this at different times and stages in our lives.
- Government. Legislation, Rules, Taxes, Tax credits, Tax deductions. Investment vehicles and the list goes on.
All those factors lead us or guide us through the Economy and the Real Estate Market. (Which is the question we asked at the beginning?) How does the market effect Real Estate- or better question how does Real Estate effect the market.
I hope I make sense to you. I am just “one of you” in the Demographics. I dare you to want to seek out more information. As they say in Star Trek once fiction today Realty “Let’s boldly go places where no one has gone before”.