When you first start looking into buying or selling Irvine, California, real estate, it may be frustrating to see how frequently prices change and discover the house you want to sell has dropped in value or the property you want to buy was far cheaper a year ago. Being able to understand real estate prices can give you a good idea of how the local real estate market is doing. Home prices tend to fluctuate for a variety of reasons.
The housing market is strongly affected by seasonal changes. Far more people are trying to move in the summer because warm weather means they don’t have to face rain, switch their child’s school mid-year, or disrupt family holiday plans. The reduced demand for housing in winter leads to a mini price drop every year. This regular cycling in housing prices means you’re likely to get the best price if you sell during summer or buy during winter.
The factors behind shifting interest rates are quite complicated. They’re often affected by government policy, economic changes, and a bank’s individual situation. Low interest rates tend to result in rising house prices because buyers can afford more expensive homes when interest rates are lower. If interest rates rise, prices for houses tend to decrease because fewer buyers are able to afford expensive homes.
Even when the nationwide housing market is experiencing a sudden dip or rise, an individual neighborhood may encounter the exact opposite, which occurs because location has a huge effect on a home’s prices. If an area becomes trendy, prices may start to suddenly rise in that area. In contrast, a neighborhood’s prices might start dropping if it gets a reputation for being a bad area.
You can get a better idea of housing price trends when you compare them to local and national employment data. When there are plenty of employment opportunities, people feel secure in the ability to earn a living, and banks are more likely to approve an employed person for a loan. The increase in people shopping for a home leads to more demand and higher prices.
The laws of supply and demand are very evident in this reason for changing home prices. If an area where many people want to live has few houses for sale, prices will start to rise because sellers tend to have several buyers competing for their homes, which means they can set the listing price higher and encourage people to bid. If there is a glut of available homes on the market, sellers may start dropping their prices to try to attract buyers.
Trusted Irvine real estate agents can help you get the most out of buying or selling a home. Call Irvine Residential Living today at 714-464-6304 to schedule an appointment.