Factors Affecting Real Estate Value

  • The four major factors that affects real estate values are physical forces, social forces, economic forces, and political forces.

A Real Estate Broker, through experience, can tell trends in some specific geographical locations.

Physical Forces

  • Natural Resources
  • Developed Resources

Social Forces

  • Family size and age-group distribution
  • Neighborhood stability and attitudes about property
  • Population growth, decline, or shifts at the community, regional and national levels
  • Life-styles and living standards, often combined with other forces
  • Attitudes about law enforcement, the role of government and individual responsibility
  • Attitudes about development, growth and ecology
  • Attitudes toward public education

Economic Forces

  • Income level or neighborhood and community residents
  • Employment opportunities and trends
  • Level of wages
  • Availability or money and credit, and interest rate levels
  • Price levels and property tax burdens
  • Personal savings and investment returns
  • General business activity
  • Supply and demand in housing
  • Production of goods and services

Political Forces

  • Zoning and land-use regulations
  • Building and safety regulations
  • Environmental protection laws
  • Police, fire and health protection services
  • Crime preventions, education and recreation services
  • Public works; power, water, transportation, sewers and flood control
  • Fiscal policy and taxation
  • Monetary policy and controls
  • Government-sponsored urban redevelopment and housing finance programs
  • Regulation of industry and business

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