What factors affect the real estate market?

Financial Analysis

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If being in the real estate industry was easy, well, then everyone would be doing it. However, the truth is that no matter how personable you are, no matter how many connections you make, no matter how hard you work, there are certain factors you simply can’t control when it comes to the productivity of the real estate market. Here are some things to consider when evaluating your potential success in the field.

The economy

It seems like every real estate downturn gets blamed on the economy. There is a reason for this. The state of the economy plays a huge part in the amount of money that is available for people to buy homes. Factors such as politics and natural gas and oil production contribute to the state of the economy and, in turn, the real estate market. For example, if politicians are feuding over financial conditions, the real estate market could be affected as result of the dispute.

Interest rates

Politics, banks and the global economy can all influence the real estate market when it comes to interest rates. The real estate crash of 2007 proved the global impact of the real estate market and increased awareness of how interest rates and loans are used in home buying. If things aren’t looking good abroad, it might affect your ability to sell homes domestically. Keep an eye on what’s happening in the global market and with foreign investment as these play large roles into the expectations of the local market as well.


Knowledge of demographic factors such as age, race, gender and median income of a particular area will help you anticipate market trends and better position your homes for sale. Knowing whether an area is home to an aging population or is attractive to young families better equips you to show the neighborhood to the appropriate buyer. And though you’d think an area with a bunch of new college grads would be a prime market in which to sell homes, recent grads are often too tied up in student loans to be serious candidates for a new house.

Working in real estate can be difficult but knowing how to anticipate its ups and downs can protect you when things turn south. Keep these factors in mind the next time you start prospecting for new buyers and you’ll have an advantage over other agents who simply don’t plan ahead.

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Victor DeFrisco Headshot
Phone: 561-951-3759
Dated: March 28th 2016
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