The real estate market depends on many market forces that work in conjunction with government policies to determine market trends. These factors, combined with investors and financial institutions, make real estate a lucrative industry.
Before you invest in real estate, make sure you know all the factors that govern the profitability of your endeavors.
Demographic data includes various categories that affect the real estate market. These include different age groups, socioeconomic divisions, and the population count in each sub-group. Aggregating these sub-groups gives us the total count of property buyers actively trading in the housing market.
The National Association of Realtors surveyed the housing market in 2017, and the results showed that the median age of property buyers was 32. College students moving to college towns also rent apartments and thus contribute to the market. This shows that the trend of buying real estate is most prevalent in a younger age group.
On the contrary, home buyers’ annual income also determines their financial status at the time of purchase. Ideally, the property value of your purchase should be a maximum of five times your gross income. The type of housing that’ll be in demand will be the one that the majority of buyers can afford.
Interest Rates and Tax Credits
High interest rates are a deterrent for prospective homebuyers who need refinancing options to fund home-buying projects. Low interest rates motivate home buyers to seek home loans to buy real estate. Interest rates spur or decline economic development by allowing investors to borrow from financial institutions.
Governmental policies can transform the face of the housing market for sellers and investors. The state can encourage investments by incentivizing investors with tax credit, deductions, and subsidiaries. Tax credits also reward investors who invest in real estate properties instead of bonds or stocks.
The low refinance rates in 2020 helped bring the economy out of the pandemic-induced slump. If not for government policies, commercial activity and real estate development would come to a standstill.
Foreign investors will come to you if you boast of a robust economy. Economic instability is the biggest deterrent for investors because it puts their money at risk. They look for investment assets that guarantee high returns. The aim is to build a diverse investment portfolio with different assets to divide the risk of default. Real estate offers a hedge against economic uncertainties, and that’s why investors prefer putting their money in it.
When they do, the property value appreciates and pushes the prices upward. This attracts more buyers because they see it as a valuable asset that promises high rewards. Buying activity stimulates the market and contributes to industrial growth.
If you’re looking for advice on real estate investments in Brevard County, reach out to Paul Bryan Realtors.
They deal in residential real estate listings in Brevard County and have helped home buyers and investors find suitable homes for sale in the area.
Whether you want to buy a multi-family unit or a luxury condominium, their real estate services are at your disposal. Feel free to call them at (321) 305-3162 for more details.