What Influences House Prices?
On the Up?
Housing Market Trends
House prices are always topical whatever the state of the housing market and are thus an interesting conversation point and a frequent subject for media attention and debate. Even if you are not a home owner yourself, property values may still affect you indirectly by limiting the choice of areas in which you can afford to rent and work. We are all affected by house prices whether we like it or not so it pays to know at least a little about the housing market where you live. A quick browse on rightmove will show you all the houses in your area which are available to rent and those up for sale. You can also use the 'Sold prices' section to find an accurate record of the prices those houses have sold for in the past. You can get a good idea of general trends in the area and gauge whether it would be better or you to rent or buy in the current climate.
Factors That Influence House Prices
Many factors will influence house prices and often property owners will find some are largely outside their control. Market trends can change overnight so you should never depend on your property increasing in value just because house prices have increased in the past. Read the small print and be aware that the value of your investment can go down as well as up.
You can spend a fortune on upgrading a house but if it just happens to be on the wrong side of town you may be in for a shock. This is why it is always prudent to do thorough research into any area you wish to buy property in. What are the schools like? Are there good transport links and is there a reasonable selection of established businesses in the area to support a workforce? If a nearby factory closes, this alone could cause house prices in the area to drop significantly if the neighbourhood becomes an unemployment black spot.
A property 'hotspot' is defined as somewhere which fulfils the needs of all types of buyers and which offers a wide range of properties for all incomes and age groups. The demand for homes in such areas will increase and when demand outstrips supply house prices will inevitably rise. The quality housing stock in any given area will always be snapped up first so if you wish to sell you must keep your home well-maintained and in good decorative order. This way you can command the best possible price in spite of any influencing factors outside your control.
Buying a home is the biggest financial outlay you will ever make and its current value will directly affect many of the major decisions in your life. You thus need to be aware of the implications that property price highs and lows can bring. You should make yourself familiar with any factors that may influence house prices in your area - for better or worse.
A House Will Be The Biggest Investment You will Ever Make
Maintaining a realistic attitude to the value of your home is by far the best view to take, whatever market trends dictate. Home improvements will give you greater enjoyment of your property but may not create a huge leap in value when compared to the house next door. This is because you cannot usually break the ceiling point for houses of the same type and size in any given area. Remember that the state of the general area will still directly influence the resale value of your home even if you've lavished vast expenditure on it.
Factors That Influence House Prices are Manifold
Improving Your Investment
A drastic fall in house prices in your area can seriously affect your prospects of moving elsewhere and thus restrict your choices. You may have to postpone your plans until house prices recover. Finding yourself in negative equity, which basically means your house is currently worth less than you paid for it, is therefore not an enviable situation if you wish to sell.
Improving or extending can often be a viable alternative to moving, if your home will not realistically sell for anything like the price you paid for it, and if you are not prepared to suffer such loss in value. It is wise to get advice from an estate agent or other reputable property professional before undertaking any major works which could affect the value of your home. Perversely, there are certain improvements that could even decrease value and as a home owner you need to be aware that highly selective improvements such as the addition of a Jacuzzi or steam cabinet do not appeal to everyone.
If you endeavour to look after your property by implementing a regular programme of repairs and maintenance, you will find that your home will have the best chance of holding its value against similar homes. This also includes repairs and upgrades to interior fixtures and fittings.
Dilapidated homes can depreciate rapidly in value, so don't neglect your duties as a home owner or you may be in for a nasty surprise when you eventually do come to put your house up for sale.
First Time Buyers Will Find This Book Useful
Do Your 'Homework'
Availability of mortgage lending and related property finance will always have a direct affect on house prices and will dictate whether people can afford to buy or not. Always enlist the help of a property professional or mortgage consultant before committing yourself to any financial outlay.
A house is really only worth what someone else is prepared to pay for it, so if the right buyer doesn't come along at the right time and you are desperate to sell, you will need to thoroughly reassess the situation and act accordingly. Don't be beaten by a drop in house prices; there may be other options available to you.
If you are happy living where you are and home values fall, it doesn't really make any difference as long as you continue to pay your mortgage regularly. Problems will only occur if you decide to sell before house prices increase or if you want to raise further funds from your home.
As well as the practical side to home ownership, responsible owners should keep a constant eye on the current market value of their home and be aware of the financial implications. This means you can make your property work for you in the best possible way, both as a home and as an investment.
In order to be well informed as to current home values in your area, why not take a look at a reliable Internet property portal like Rightmove in the UK or Realtor.com in the USA. Here you can find out everything you need to know about home values anywhere in the world. There are 'sold prices' sections on both sites which will provide exact prices that houses have achieved and you can even discover what your home is likely to be worth without even contacting an estate agent. By conducting a house price comparison with similar properties in your area, you may even be pleasantly surprised that it is worth more than you previously thought!
A Great Property Series
House Prices - Is Now The Time to Buy?
© 2015 Stella Kaye