What really drives prices in Real Estate?

By
Real Estate Agent with ERA A.J. Cali Real Estate

wiresEveryone knows that if you have a house in a great location, let's say on a pretty cul-de-sac with lots of trees and just a few neighbors in a town with a great school system and easy access to transit, then that house would be worth more than a house that backs up to the train tracks on a major street in the same town.  As you've probably heard that's the old maxim, location, location, location.

So the second house would take longer to sell right?  Well, not necessarily.

Real estate, like any other commodity is driven by consumer demand, in other words, the potential buyers are the one's who drive the prices.  We have recently seen the prices in the stock markets all over the world drop.  The simple reason is that more people are keeping their money in liquid assets; therefore, they are removing their money from less liquid markets and causing prices to drop.

In any market, it is the buyer's who drive the prices, even in a seller's market.  So the best way to get the best price in a falling market, of any kind, is to price the commodity, i.e. your house, where the buyer's will feel that it has the best value.  So, if the house on the train track is priced where the buyer still feels that they are getting a good value, then it will sell before the house on the pretty cul-de-sac.

 

 

Comments (3)

Anonymous
Anonymous

Good to have you on Active Rain.  This is a good site for gathering information and interesting to see what others are blogging about. Contact us if we can be of service to you. We would be happy to send you a referral or to take good care of any referral you would send to us.

Jan 23, 2009 01:30 PM
#1
James & Amy Galligan
Keller Williams Real Estate - Stroudsburg, PA

Great blog post.. it really all comes down to taking all aspects into consideration when pricing the property... You were right, if it is priced right, it WILL sell faster no matter where it is!!

Feb 18, 2009 12:10 PM
Alberta Ceres-Buda
ERA A.J. Cali Real Estate - Hawthorne, NJ

Hi James and Amy!  Thank you for your comment....these days our business and helping seller's determine what pricing to sell means has become a tad more difficult:)

Feb 24, 2009 03:31 PM