Historically, the real estate market was somewhat cyclical, with sellers, buyers, and neutrals occasionally seeming to have the upper hand. However, we have witnessed, over the last year or so, at or near record levels/rates of price increases. Some wonder if this will continue and, if so, for how long, while others seem to believe this will be the new thing: normal! Since there are several factors involved, this article will briefly consider, examine, review, and discuss six of the most relevant, and why they are important, and the possible impacts and ramifications.

1. Mortgage rates: Never before, at least in recent memory, have we witnessed this prolonged period of record or near-record low mortgage interest rates! Even a small amount of rate increase has lowered interest, to some extent, so what could happen, when the Federal Reserve Bank raises borrowing costs, as many believe, will happen, at least , in the end. next year Given that each one percent increase, in which country, increases monthly costs by more than $60 per $100,000 borrowed, per month, it’s easy to see the impact and potential ramifications!

two. Offer and demand: As in most economic issues/problems, the Law of Supply and Demand applies to housing and real estate activities, etc. When supply exceeds demand, prices go down or flat, and when the opposite happens, house prices go up!

3. Inventory: Homeowners create the second principle, whether they are ready and willing to put their property on the market or not! This creates the degree of so-called inventory, which begins the cycle of supply and demand!

Four. Buyer interest/motivation: Differentiating between those who enjoy looking at real estate and truly qualified potential buyers is essential! How much and for how long does a significant degree of motivated buyer interest continue, and at what level often determines perceived values, etc.!

5. Strength of the economy: We have witnessed periods that were inflationary, recessions, depressions, and stable/stagnant, and few have been able to accurately predict the timing of these! How long an economy stays strong and/or is believed to have an impact on buying conditions and any willingness to buy homes!

6. Perceptions: Perceptions are often more significant than reality, in terms of the behavior of real estate buyers and sellers! When certain future possibilities are perceived by some, they often dictate their actions and behaviors!

Will this ever-increasing rate of house prices continue, or is it the new normal? Is it simply a shorter term trend and will we see changes in market conditions?