Local economic conditions, household wealth, employment, housing affordability & cost of living, venture capital & foreign investment, pro/anti-business sentiment Factors in Real Estate Markets Many of these factors’ effects can swing both positive and negative; sometimes effects are counter-intuitive (e.g. a pandemic causing a fierce housing boom). Economic, political, social and ecological dynamics constantly change and interact in difficult-to-predict ways. Market- changing developments can percolate gradually, or arise quickly and unexpectedly. The impact of specific factors can vary by market segment.
Interest rates
Stock markets
Inflation
Consumer confidence
Debt levels: personal, corporate & government
Massive, governmental economic interventions: post 9/11/2001, post 9/2008, post 3/2020
Natural disasters: COVID, earthquakes, fires, drought, floods, hurricanes
Domestic & foreign migration; federal immigration policy; demographic changes
Tax law e.g. real estate tax benefits & credits, 2017 SALT-deduction limitation
Rental market dynamics
State income tax disparities
International economic/political events, e.g. large oil price swings, military conflict (invasion of Ukraine), economic conflict (China, U.S.), foreign economic crises
Local, state & national politics; partisan politics
Social & quality of life issues: Crime, homelessness, schools, commute, cultural & outdoor options
Financial industry manipulation, fraud, engineering, recklessness, e.g. junk bonds, S&L collapse, predatory lending, abandonment of risk mgmt. & underwriting standards, CDOs & rating-agency deceit, insider trading, over-leveraged investing; irrational exuberance
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