What’s Your Home Worth: These Factors Will Tell You
Buying or selling a home is frustrating for many reasons. One of these is housing prices: they’re up, they’re down, they’re fleeting. Most of us know this, but what we might not know is why.
So, let’s look at the factors that influence how much a house goes for in any given market:
Behind door number 1 is location: location, location, location. But what, exactly, makes one location more desirable than another? The quality of schools is the largest factor, but proximity weighs heavily, too. Living where there is lots to do (recreational centers and hiking trails) is a draw. So is living where there is lots of work.
There are used homes that look new. Then there are used homes that look used. The former is usually the result of upgrades: time can’t be stopped – that’s why updates are a thing! A home that is updated will always go for a higher price than one that is falling apart. It makes perfect sense: home buyers want a good roof over their head and not one that’s leaking.
Another factor that helps dictate the selling price of a home is the nearby houses: appraisers and agents use recent sales to determine a home’s best asking price. There is deviation, of course; size, for instance, is a huge factor. So are the number of bedrooms, updates (as mentioned above), and whether the property has a basement. All of this weighs into the appraisal value, which is the formal process for pricing any given property.
Anyone who tried to sell in 2008 knows that nothing influences the price of a home like the market itself. When the economy is strong, home prices are higher. When the economy struggles, home prices drop. This impact is felt greatest in areas with a lot of housing industry-dependent jobs (like construction), as well as areas that rely on people having disposable income (like Las Vegas).
Interest rates certainly have their say in how the market operates. When the Federal Reserve lowers the interest rate, the banks offer lower mortgages. This makes the overall mortgage more affordable and increases the amount a homeowner can borrow. This allows more people to purchase homes, adding an economic boost.
This all plays a role in what your home will sell for. But, of course, home buying isn’t an exact science and you never know what someone will find enticing: one man’s dump is another man’s castle.
If you’re moving to Seattle or the surrounding areas, get in touch with us. We’ll offer information about housing prices and anything else you may need.