Tips: Do You Know What Affects The "Market Value" Of Your Home ?

Five major factors influence the fair market value of any home:

1. Supply and Demand.

   As with many commodities the concept of "Supply and Demand" also effects the value of your home. A "Seller’s Market" exists, where too few homes are for sale to satisfy the number of buyers in the market place. What is for sale will usually command a higher price. At other times a "Buyer’s Market" might exist where many homes for sale compete for too few buyers in the market place. In this type of market home prices tend to be lower in order to stimulate sales.

2. Interest Rates.

   When certain negative economic factors prevail, higher interest rates are usually the result. Fewer buyers are then able to qualify for financing, and homes may take longer to sell or require price reductions. 

3. Seasonal Markets.

   Weather plays an active role in creating a demand and in influencing the sale of homes. In Canada for example, buyers are most active in the Spring months when the snow disappears and also because closing dates are more obtainable to coincide with the end of the school year. Summers are typically the slowest months with people off vacationing and children off school. In the Fall months the market becomes quite active with children returning to school and the effort of buyers to make a purchase before the winter comes. Contrary to belief, there is an active real estate market in the winter. Though not too popular with the "move up" buyer winter markets bring out the serious buyer like relocation buyers and job transferees. 

4. Economic Climate.

   Besides the national economic climate, business conditions of any community strongly affect home sales. Where new business is building, real estate prospers; where business is faltering, home prices drop.

5. Political Actions.

   What happens in Ottawa, your province, or your home town or city directly affects your property. Changes in income taxes and home buying incentives change the value of your home. So do changes in local zoning,  property taxes, community projects, and developmental controls and limits.