When you are about to buy a new home, you are making one of the biggest decision in your life. You are changing your life style forever. While having a home can create a much better lifestyle for you, it is also an important investment. People always want to know whether their property will appreciate or not over the years. Although nobody can foresee future, knowing the past economic life cyle and with experience in real estate business, we can make educated prediction of the real estate market based on the following 3 main factors:
1. The unemployment rate of young adults in your area:
Young adults who are ready to buy their first home are mostly in their mid 20s to mid 30s. If the unemployment rate of this group of people are relatively high in your area, it will affect the real estate and rental market of the area. This will affect the real estate market as the number of buyers are less due to their financial situations. It also implies the industrial and economic situation of your area that higher the unemployment, the less business activities, and therefore less real estate activities.
2. The number of new home constructions in your area:
If you see a lot of new home constructions going on in your area, it means more land devolepment and more inventory for the future home buyers. This is a good thing when it comes to not only real estate, but the overall economy in your area.
3. Home vacancy in your area:
Home vacany due to foreclosure because of owner failing to make mortagage payment, tax payment or other financial diffculties may cause the value of all of the homes with in 200 yards radius to drop from 1.8% to 9% according to The Federal Reserve Banks.
