Factors Influencing Home Pricing

Factors Influencing Home Pricing
by Kevyn Pitts - February 10, 2023

When buying or selling a property, there are many factors that influence the pricing. So how do you determine the best time to buy or sell? Of course, the property itself matters too; several factors influence how valuable the property is. 

So if you are looking to buy or sell, read on to learn how home pricing is affected from real estate experts.

The Pandemic

“The real estate market is extremely hot at the moment, and many factors are influencing the situation. Interest rates are still extremely low, which typically stimulates the demand. Although the pandemic has affected the employment of many, others - those who have been working throughout the pandemic, for example- have also increased their savings thanks in part to the government assistance programs and may have more money saved for a down payment. Among them, some fear that the interest rates may increase in the future to fight back inflation and feel a sense of urgency to buy. 

“The pandemic has also affected how people live and think about homeownership. More people than ever are working from home and are likely to do so, at least part-time, for the foreseeable future. The place where they live is becoming more independent from the place where they work. They may also have found out that their current housing situation does not fit their needs (they want more space to set up a home office, access to an outdoor area, etc.) People who were already on the verge of moving are ready to do so. Many were previously renters in big cities and are moving for more affordable locations in the suburbs or secondary cities. 

“On the other hand, some homeowners are hesitating to put their house on the market. The future is still uncertain and they do not want to deal with the current high prices to purchase a new property. The bottom line is that inventory is limited, demand is high, and interest rates are low, leading to a perfect storm driving up property prices.” 

Omer Reiner, licensed Realtor & president of FL Cash Home Buyers, LLC; a real estate investment company

Supply and Demand

“The pricing of real estate is dependent upon many factors, but they are all related to the basic principle of supply and demand. Interest rates have hit historical lows in the past year. The COVID pandemic has caused many people to want to move out of highly populated areas to have their own space. Also, with so many working from home, more people are looking to move outside of large urban areas since they no longer need to commute to the office. 

“All of these factors have increased demand in many markets while supply chain issues have caused building materials to skyrocket in price making it more difficult and expensive to increase the supply through new builds and renovations. With demand increasing at a faster pace than supply can keep up with, home prices have increased significantly.”

Erik Wright, Owner of New Horizon Home Buyers

Unique Features

“One of the most vital factors in pricing a home is knowing what the comparables are and identifying any unique features that the home has that would command a higher price. Really diving into the data of the other homes in the area is key because certain homes may have gotten a higher price due to a unique offering. Other factors include identifying the style of the home, knowing what is appealing and wanted at the time, i.e., home offices making a comeback, and the home seller's personal situation, i.e., having to sell fast will mean a more aggressive listing price.”

Jason Gelios, Top-producing REALTOR® with Community Choice Realty, Author of the real estate book ‘Think like a REALTOR®’ and the creator of The AskJasonGelios Real Estate Show.

Location, Value of Properties in the Neighborhood

“There are some key factors that impact the cost of real estate. First is the location. Things like the local school district, distance from shopping/grocery stores, and job opportunities impact the value of a property. Second, the value of properties in your neighborhood can influence the cost of your home. Third, your home's size and usable living space can impact its value (the bigger it is, the more valuable your home is and vice versa). Your home's upgrades and age will play a role in determining its value (the newer it is and the more upgrades it has, the more it will be worth). 

“Additionally, the economy and interest rates will also play a role in determining the value of your home. While you can't control most of these factors, you can make upgrades to your home to increase its value. Keep in mind though that any upgrades you make will need to be able to be supported by the local market in order to be worthwhile. For example, bathroom and kitchen upgrades tend to offer the most bang for your buck.”

Jennifer Ward, Founder of the Terre Haute, IN-based company, House Buying Mamas

And Again- Location!

“Undoubtedly, location is one of the highest influential factors when it comes to home pricing. It is the first thing buyers will be looking into. No family is going to settle for a shady alley and hence, that makes the sunny neighborhoods a goldmine for home sellers. A healthy residential area will always fetch higher prices, understandably.”

Size and Space

“Yet again, the calculation of price will be based on the size of the house which is an understood factor. The bigger the house, the higher will be its prices. Prices are determined based on per square foot.” 

Andrea Boyd, Community Director Tailored Space

MOST RECENT
Vikki Gerrard La Crosse WI Explores Crafting with Upcycled Materials
Vikki Gerrard La Crosse WI Explores Crafting with Upcycled Materials
Do you ever take a good, hard look at all the items in your home that are no longer being used? Instead of letting those objects collect dust and occupy space, why not transform them into something new and exciting? ...
6 Reasons to Consider Outsourcing Order Fulfillment for Your E-Commerce Business
6 Reasons to Consider Outsourcing Order Fulfillment for Your E-Commerce Business
Outsourcing order fulfillment offers numerous advantages beyond merely not having to do the work yourself.   To run a successful business, you must meet your consumers’ requirements and expectations. Those expectations are high when it comes to order fulfillment. Delayed, missing, ...
Factors To Consider When Selecting A Location For Your Fulfillment Center
Factors To Consider When Selecting A Location For Your Fulfillment Center
You know what they say in the real estate realm,  location, location, location! This is particularly true when choosing the best site for your fulfillment warehouse.  Whether you're a large corporation looking for a new fulfillment warehouse or a garage-based ...
How Much Are Closing Costs
How Much Are Closing Costs?
One surprising statistic in the world of real estate is that the average homebuyer pays between 2% and 5% of their home's purchase price in closing costs. So, how much are closing costs really? And who is responsible for paying them?  As ...
What Is a One Time Close Construction Loan Exploring This Unique Home Loan Product
What Is a One Time Close Construction Loan? Exploring This Unique Home Loan Product
If you’re the kind of person who has always dreamed of walking into a home that fits you like a glove, then you’re likely interested in building a new home. Maybe you have a piece of scenic property that you’d ...
1 2 3 73
logo
Prudential Cal strives to provide the most detailed information about the real estate industry. We assist people in making the best decisions possible by offering unique insights into the global real estate market and advice for both homebuyers and sellers.
Quicklinks
Additional Information
Copyright © 2023 Prudential Cal. All Rights Reserved.
DMCA.com Protection Status
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram