A Real estate is a piece of land or property made up of buildings as well as the natural resources including uncultivated flora and fauna, farmed crops and livestock, water, and any additional mineral deposits. The real estate sector is one of the most important sectors in the economy. It helps in stabilizing the economy of the country and it helps in boosting the income of the people of the country .Real estate can serve as a constant source of income and employment. Real estate is a great investment for the renter and the buyer. Investors enjoy excellent rates of return, tax advantages and owning a real estate can help in building the individual’s wealth.
The construction of commercial houses, residential housing, and business spaces, such as hotels, restaurants, theaters, and industrial buildings, namely factories and government buildings, are all covered by the real estate sector. Real estate caters to the demands of recreation, income and employment. The real estate industry is said to be multipurpose in nature.
Several factors can affect real estate prices some of which include demographics, interest rates, the economy, government policies and from a sociological point of view neighbors can affect real estate prices. Demographics includes the data that describes the composition of a population, such as gender, age, race, income, and so on. While demographics are often overlooked, they’re a significant factor that affects how real estate is priced and what types of properties are in demand. Eg: Some people prefer apartments located in less populated areas depending on their income level.
Changes in interest rates can greatly influence a would-be buyer’s ability to purchase a residential property. As interest rates drop, the cost to obtain a mortgage to buy a home is lowered, thus creating a higher demand for real estate (which, incidentally, pushes prices up). Impact on real estate investment trusts or other equity investments in real estate, more closely resembling that of the relationship between a bond and interest rates Interest rates have a substantially different.
Generally measured by economic indicators such as the GDP, manufacturing activity, employment data, and the like, the economy and the real estate market have a positively correlated relationship with each other- when one rises, the other rises, and when one falls, the other does as well. Legislation generally plays a major role in determining property demand and prices, with deductions, subsidies, and tax credits being some of the ways the government can temporarily boost demand for real estate.
The value of your house is not only shaped by the home itself but researchers say that the neighborhood can also have a positive or negative impact on the price of your home depending on its type. According to Barbara Corcoran “Buyers decide in the first eight seconds of seeing a home if they’re interested in buying it. Get out of your car, walk in their shoes and see what they see within the first eight seconds.”
A buyer is not only buying a house; they’re buying into a lifestyle. They’re making a decision to live in a rural, suburban or urban area, near work, schools or other amenities. The more demand there is for a particular neighborhood or property type, the more the value of your property will increase.
The type of neighbors surrounding the property also plays an important role in determining the price of the real estate. This factor is generally overlooked. Researchers say that to most people neighbors matter and living next to a good neighbor is always preferred by buyers. Having good neighbors can raise your property value up to an average of 9.4%. Property buyers are willing to pay more if they find a friendly neighbor living next door. This may be due to the sense of security if good neighbors surround them. Having good neighbors can promote the sale of real estate property and their increased involvement in advertising the property can help in generating more potential buyers.
According to the property world report a bad neighbor can severely devalue your property price up to 10%. This sort of effect is referred to as external obsolescence; where external factors have an effect on your home’s value, instead of factors on your property that can cause a decrease. Noisy and uncooperative neighbors can often bother the potential buyers of the property thereby affecting the sale and price of the property. Nobody wants to hear a neighbor’s noisy dog or thumping music at all hours of the day, and anyone who has dealt with these issues before knows the frustration of trying to enjoy some peace and quiet amidst this ruckus and should that neighbor start up their boom box, or leave their pooch outside during your open home, potential buyers are unlikely to be impressed. One of the most common questions asked by a buyer is mostly about the people in the neighborhood especially their immediate neighbors. This explains how important a pleasant neighborhood could be.
There are several ways by which neighbors can affect your home value including crime, unpleasant odours, poorly maintained exteriors, foreclosure, annoying pets, and unkept yards and so on. There are many neighborhood features that may add value to your home and increase interest from buyers including low crime rates, tree-lined streets, and scenic views. Nearby services with good reputations e.g. hospitals, schools, access to recreation and entertainment e.g. parks, trails, restaurants, cafes, shops and so on. From the sociological perspective neighbors and neighborhoods play a significantly important role in affecting real estate prices.