The Denver 100 LLC
Leah Klepetka, The Denver 100 LLCPhone: (720) 271-7798
Email: [email protected]

Here's What Affects the Housing Market

by Leah Klepetka 09/04/2022

Whether you’re buying or selling a house, it’s important to have a basic understanding of the housing market. However, that can be a lot more complicated than it seems. Many factors affect both your local and national housing markets, some of which can be hard to track and quantify. However, there are some basics you can start with to gain a better understanding.

Here are the fundamental things that affect the housing market:

The Economy

The more active and strong the economy is, the better the housing market is. A strong economy means lots of people are spending money. This includes buying houses. Buyers stimulate the economy by taking up inventory and creating higher demand, which creates higher property values. During periods of economic struggle, the housing market may also suffer. The most common examples of this are properties staying on the market for a long time and decreasing property values.

Interest Rates

For many, a mortgage is essential to buying a home. Therefore, the interest rates offered by lenders can have a huge effect on the overall housing market. If mortgage rates are high, it can make would-be buyers hesitant to purchase. When the rates are lower, there might be much more buyer activity. Interest rates vary daily, but there are also longer-term trends buyers and sellers can follow for more insight into the overall housing market.

Demographics

Demographics like age, household size and income all play a part in a local housing market. These facts affect property values in specific regions. An area with highly rated schools will attract families, for example. An area near a college campus may have a hot rental market but very little inventory for purchase. While there are many factors that determine the property values of an area, knowing the needs of your target audience is key to selling or buying in a community.

Buyer’s vs. Seller’s Market

Buyer’s and seller’s markets have different levels of supply and demand. For example, in a buyer’s market, there are lots of properties available with low prices and mortgage rates. A seller’s market has high demand because of a lack of inventory and therefore also has higher prices. The current amount of supply compared to the amount of demand for real estate in a certain area will affect the housing market.

Knowing your local housing market will help you determine the best time to buy or sell a home. While the market is complex and constantly changing, keep these factors in mind when making your next real estate decision.

About the Author
Author

Leah Klepetka

I am an experienced, full-time real estate professional and Colorado enthusiast. I love everything Colorado from skiing and hiking to the ballet at Ellie Calkins. I am passionate about residential real estate and am blessed to help buyers and sellers in the Denver metro. I am dedicated to helping my clients get the most for the sale of their home when selling, and to finding the perfect next home when buying. I have been with The Denver 100 since 2013.

What clients are saying:

“She has a knack for understanding the market and the goals and needs of buyers and sellers.”

“She is easy to work with and answers the phone when you call."