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There is one house in particular that I am looking at. It is a couple of years old in a newer developed suburban area. The growth rate for the city is 69% since 2000. Just down the road are a subdivision with newer large homes with acerage, while in the other direction a new outlet mall and shopping center is being built. Three blocks away a convention center is being built while 250 units of luxury apartments are also under construction.
Is the home value of houses in the area most likely to increase? The county's property value has been said to have decreased by 2-3% last year.
There is one house in particular that I am looking at. It is a couple of years old in a newer developed suburban area. The growth rate for the city is 69% since 2000. Just down the road are a subdivision with newer large homes with acerage, while in the other direction a new outlet mall and shopping center is being built. Three blocks away a convention center is being built while 250 units of luxury apartments are also under construction.
Is the home value of houses in the area most likely to increase? The county's property value has been said to have decreased by 2-3% last year.
How are the schools for that neighborhood? Values often (not always) follow the success or failure of schools.
Property values go up and down depending on supply and demand. If you are looking to buy a house due to appreciating home values, this is probably not the market to buy in...in most areas.
Now having said that...areas that have
1) good schools
2) more homeowners vs. renters
3) diverse populations (ie older retired couples, families, singles, etc)
4) not a lot of resale
It's just simple demand and supply! Nothing else. The demand part will be driven by such factors that the above posters mentioned and some more. The supply part comes from the fact that the people living in the area wanting to get out or not for whatever reasonn(opposit of what created the demand). If everybody in the neignborhood hold, you would have to pay higher to convince one of them to get out by "telling" him "look you can get a nice neigborhood than this for this money." If he accepts, that would set the price. If more people want to get out that would lower the price. If the original person didn't take what you offer, you would have to up your offer and the price will go up. Of course, this is a very simplified representation.
I think there is a difference between a property's price and value. The secret to investing is to understand that difference. If you find a property whose value is greater than the price, it would make a good investment.
That is basically true of all investments. Real estate differs because the value is so hard to determine we often fall into the trap of using comparable prices to determine value. Also emotions play into real estate more than other investments.
I think there is a difference between a property's price and value. The secret to investing is to understand that difference. If you find a property whose value is greater than the price, it would make a good investment.
That is basically true of all investments. Real estate differs because the value is so hard to determine we often fall into the trap of using comparable prices to determine value. Also emotions play into real estate more than other investments.
I agree to certain extent what you are saying about value and price but in the end it still is demand and supply. Value is basically a forecast of future demand. when you say "if you find a property whose value is greater than the price" you are basically saying there is a "future" demand for the propety than the price does reflect NOW. Now forecasting future demand could be tricky.
There is also the problem of perception. Even if you could put value on something (difficult to do) there is a differenet perceived value. (may not be a good analogy to RE) but a recent study on athletes showed that they thought they benefited from an energy drink that was labled high price compared to the cheap one that actually has all the nutrition that scietifically known (value) to enhance athletes performance.
Property values go up and down depending on supply and demand. If you are looking to buy a house due to appreciating home values, this is probably not the market to buy in...in most areas.
Now having said that...areas that have
1) good schools
2) more homeowners vs. renters
3) diverse populations (ie older retired couples, families, singles, etc)
4) not a lot of resale
will tend to fare better over time.
You just described my neighborhood. Very little for sale here at the moment, only one rental for lease that I am aware of, and the average sale price has increased faster than inflation every year since 2000 despite the credit crunch.
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