2006-11-04 03:38:29 · 17 answers · asked by Bazza1 1 in Business & Finance ➔ Renting & Real Estate
Property prices are no different than anything else. It is the changes in the supply and demand. There are many reason these change; interest rates, population growth in the particular area, number of homes / apartments available, the price differences between existing homes and new homes, the relative costs to operate or live in 1 area vs another, quality of the school districts, etc.
Prices can go up and prices can go down.
2006-11-04 03:55:01 · answer #1 · answered by Jim7368 3 · 0⤊ 0⤋
Property prices - like all prices in a free market - are governed by the law of supply and demand. The old advice to buy land, "because they aren't making it any more" applies to some extent: the supply is limited.
There are some very cheap houses in Britain, but they are in places where few people want to live. London property prices are increasing now, but ultimately anything is only worth what somebody is willing to pay for it. At some point London prices will rise to the point where fewer people are prepared to pay them, and then they will slack off and the rest of the country will catch up again. But don't expect this to happen until after Christmas, when the City boys will put much of their bonuses into property. They do this because if you buy wisely, it's a rock solid investment, providing income and capital growth.
Another reason is the appalling reputation of the Financial Services Industry, who have mis-sold Endowments and cheated so many people out of their pensions. Anybody who can invest capital, therefore, invests it in property, over which they have some control. Unlike a pension pot, it will not evaporate overnight, and you can pass it on to your children when you die.
You did not ask about the morality of all this, so I have not addressed it.
2006-11-04 12:00:01 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The home appreciates in value, so the price increases as a result. Also, supply and demand causes prices to increase. And last but not least, buyer stupidity causes prices to increase, as it only takes one buyer to purchase a house that is overpriced and then next thing you know, other sellers are selling their homes for an outrageous price, and so on and so on.
No, greedy real estate agents do not cause the price to increase, like some clueless person indicated above. The agent sets the price that the owner wants him/her to set it at. Agents only suggest a price, but the owner has the final say. You need to get a clue. You must be a self-proclaimed expert in real estate, a.k.a., a FSBO.
2006-11-04 13:33:40 · answer #3 · answered by Cheeky Realtor 3 · 0⤊ 0⤋
In addition to the usual market forces of supply and demand, there are many suggestions that estate agents like to inflate prices to increase their commission. Agents often quote a high price to a prospective vendor to get their business, only for the house to stay unsold for a while, at which point the agent suggests a price drop to the correct one. If you buy and sell privately this is avoided.
A good private sale web site to try is www.mykeys.co.uk
2006-11-07 05:56:26 · answer #4 · answered by simon r 3 · 0⤊ 0⤋
You will notice when Mortgage rates increase that house properties come down. I guess it is a way of balancing the system. The sale or purchase of a house in the Spring and Summer increase due the demand and of course if there are a surplus of homes that also makes the market more competitive.
2006-11-04 11:40:18 · answer #5 · answered by dogloverdi 6 · 0⤊ 0⤋
It's simply about what people are willing to pay.
If your selling a house, a car, an old pair of football boots on Ebay your usually wanting as much money as possible and the rarer the item you have, the more someone will be willing to pay.
There are many factors that influence the amount you'll get but it you had a car worth £5,000 and someone offered you £10,000 you'd take it.
The value or worth of an item sometimes has very little to do with what people pay, Art is a prime example.
Occationally you get a bargain in life but more often that not you do get what you pay for.
2006-11-04 11:52:13 · answer #6 · answered by Anonymous · 0⤊ 0⤋
At first is was the idea that the is a shortage, going back to supply and demand. Then with a jump in prices that called out lot of investors that further made a false shortage.
They made this false shortage by playing game with the MLS and having several MLS, not have new homes on the MLS and the so call exclusive listings were they did not even put it on the MLS. Bottom line they shorted the market and created a false shortage.
They pulled the wool over body's eyes, do you think the market has been fare and open with full disclosure?? Soon there will be a mandatory public assessable County ran MLS.
Check out the details on this web site.
http://www.breakingbubble.com/index.htm
2006-11-04 11:47:48 · answer #7 · answered by Anonymous · 0⤊ 2⤋
Supply and demand. If there are more people wanting houses than there are houses available - up goes the price.
Other way around - if there were loads of houses for sale and few buyers, then it would be a 'buyers market' and the price comes down.
I wish it was a buyers market right now, but the estate agents are cleaning up and raking in a whole load of commission.
2006-11-04 11:46:31 · answer #8 · answered by superman in disguise 4 · 0⤊ 0⤋
I saw on tv that the area of the land increses the price of the property with time. if you hve vast open area and a small house then it will be more expensive then the property in which there is less open area and a big house.
2006-11-04 12:31:16 · answer #9 · answered by Ewnet 3 · 0⤊ 1⤋
It is a combination of what people are willing (and able) to pay, how many people in the market looking for properties,salary increases and inflation
2006-11-04 11:41:04 · answer #10 · answered by Vicky M 2 · 1⤊ 0⤋