{"id":11524,"date":"2019-07-31T16:25:28","date_gmt":"2019-07-31T23:25:28","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=11524"},"modified":"2026-03-24T11:25:11","modified_gmt":"2026-03-24T18:25:11","slug":"real-estate-property-value","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/real-estate-property-value\/","title":{"rendered":"From the Global Stage to Your Backyard: 10 Factors that Influence Real Estate Property Values"},"content":{"rendered":"<p>As a property owner, you can assert some control over the value of your home with <a href=\"https:\/\/www.homelight.com\/blog\/home-maintenance-tips\/\">diligent upkeep<\/a> and <a href=\"https:\/\/www.homelight.com\/blog\/which-renovations-increase-home-value\/\">selective home updates<\/a>. At the same time, dozens of factors large and small impact the state of housing as a whole and how real estate performs on a local level.<\/p>\n<p>A global event that shakes consumer confidence could suddenly cause homebuyer demand to take a nosedive and put downward pressure on home prices. Meanwhile, the development of a new shopping center near where you live might add thousands of dollars to your home\u2019s worth over time.<\/p>\n<p>National trends matter, but so does whatever\u2019s happening in your backyard. When you think about real estate property values, it\u2019s impossible to get the full picture until you understand both sides.<\/p>\n<p>Knowing that, let\u2019s cover the top five macro and micro factors that influence residential home values.<\/p>\n<figure id=\"attachment_11603\" aria-describedby=\"caption-attachment-11603\" style=\"width: 700px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/59.jpg\" target=\"_blank\"><img decoding=\"async\" width=\"700\" height=\"350\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/59.jpg\" class=\"attachment-content size-content\" alt=\"real estate property value\" srcset=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/59.jpg 700w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/59-64x32.jpg 64w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/59-128x64.jpg 128w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/59-192x96.jpg 192w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/59-432x216.jpg 432w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/59-500x250.jpg 500w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><figcaption id=\"caption-attachment-11603\" class=\"wp-caption-text\">Source: (chuttersnap\/ Unsplash)<\/figcaption><\/figure>\n<h2>5 micro factors that influence real estate property values<\/h2>\n<h3>1. The economy<\/h3>\n<p>When the economy\u2019s shaky, people worry about salary freezes, rising prices, and getting laid off or fired with little hope of finding another job\u2014which means they\u2019ll worry about losing their house.<\/p>\n<p>And while falling behind on rent might get you kicked out of an apartment, missed mortgage payments lead to defaulting on your loan, losing your house and long-term credit damage.<\/p>\n<p>Plus, people worried about losing their homes are less likely to take the risk to buy one.<\/p>\n<p>However, when the economy\u2019s going strong, people are more confident that they\u2019ll be able to get another, maybe an even better job, if they leave or lose their current position.<\/p>\n<p>That\u2019s why top-notch agents watch economic factors like <a href=\"https:\/\/www.investopedia.com\/terms\/j\/jobsgrowth.asp\">job growth<\/a>, <a href=\"https:\/\/www.bls.gov\/news.release\/pdf\/empsit.pdf\">unemployment rates<\/a>, and the <a href=\"https:\/\/www.frbsf.org\/education\/publications\/doctor-econ\/2003\/december\/housing-affordability-index\/\">Housing Affordability Index<\/a>.<\/p>\n<figure id=\"attachment_11595\" aria-describedby=\"caption-attachment-11595\" style=\"width: 1406px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.26.26-PM.png\" target=\"_blank\"><img decoding=\"async\" width=\"775\" height=\"289\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.26.26-PM-775x289.png\" class=\"attachment-content size-content\" alt=\"real estate property value - unemployment rate\" srcset=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.26.26-PM-775x289.png 775w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.26.26-PM-768x286.png 768w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.26.26-PM-64x24.png 64w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.26.26-PM-128x48.png 128w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.26.26-PM-192x72.png 192w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.26.26-PM-432x161.png 432w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.26.26-PM-500x186.png 500w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.26.26-PM-800x298.png 800w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.26.26-PM.png 1406w\" sizes=\"(max-width: 775px) 100vw, 775px\" \/><\/a><figcaption id=\"caption-attachment-11595\" class=\"wp-caption-text\"><\/a> Source: (BLS)<\/figcaption><\/figure>\n<figure id=\"attachment_11594\" aria-describedby=\"caption-attachment-11594\" style=\"width: 1402px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.27.12-PM.jpg\" target=\"_blank\"><img decoding=\"async\" width=\"775\" height=\"797\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.27.12-PM-775x797.jpg\" class=\"attachment-content size-content\" alt=\"real estate property value- job growth\" srcset=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.27.12-PM-775x797.jpg 775w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.27.12-PM-768x790.jpg 768w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.27.12-PM-64x66.jpg 64w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.27.12-PM-128x132.jpg 128w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.27.12-PM-192x197.jpg 192w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.27.12-PM-432x444.jpg 432w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.27.12-PM-486x500.jpg 486w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.27.12-PM-778x800.jpg 778w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.27.12-PM.jpg 1402w\" sizes=\"(max-width: 775px) 100vw, 775px\" \/><\/a><figcaption id=\"caption-attachment-11594\" class=\"wp-caption-text\"><\/a> Source: (NAR)<\/figcaption><\/figure>\n<p>\u201cUnemployment, interest rates, and the economy absolutely play into real estate market trends,\u201d says <a href=\"https:\/\/www.homelight.com\/agents\/brenda-geraci-ca-01373612\">Brenda Geraci<\/a>, a top agent in the Los Angeles, CA suburbs with 17 years experience helping sellers and investors properly price their properties.<\/p>\n<blockquote><p>\u201cRight now, the economy is strong, unemployment numbers are low, and interest rates are trending downward, and that gives buyers more buying power\u2014they can afford a better house when economic conditions are good.\u201d<\/p><\/blockquote>\n<p><a href=\"https:\/\/www.investopedia.com\/terms\/c\/cci.asp\">Consumer confidence<\/a> and <a href=\"https:\/\/www.investopedia.com\/terms\/c\/consumer-sentiment.asp\">consumer sentiment<\/a> are so important to the economic health of the U.S., that these trends are tracked by multiple organizations.<\/p>\n<figure id=\"attachment_11592\" aria-describedby=\"caption-attachment-11592\" style=\"width: 1936px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM.png\" target=\"_blank\"><img decoding=\"async\" width=\"775\" height=\"347\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM-775x347.png\" class=\"attachment-content size-content\" alt=\"\" srcset=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM-775x347.png 775w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM-768x344.png 768w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM-1536x687.png 1536w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM-64x29.png 64w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM-128x57.png 128w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM-192x86.png 192w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM-432x193.png 432w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM-1920x859.png 1920w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM-500x224.png 500w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM-800x358.png 800w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.21.32-PM.png 1936w\" sizes=\"(max-width: 775px) 100vw, 775px\" \/><\/a><figcaption id=\"caption-attachment-11592\" class=\"wp-caption-text\"><\/a> Source: (Surveys of Consumers, University of Michigan)<\/figcaption><\/figure>\n<figure id=\"attachment_11593\" aria-describedby=\"caption-attachment-11593\" style=\"width: 3360px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM.png\" target=\"_blank\"><img decoding=\"async\" width=\"775\" height=\"483\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM-775x483.png\" class=\"attachment-content size-content\" alt=\"real estate property value - Consumer confidence index (CCI)\" srcset=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM-775x483.png 775w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM-768x479.png 768w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM-1536x958.png 1536w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM-2048x1278.png 2048w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM-64x40.png 64w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM-128x80.png 128w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM-192x120.png 192w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM-432x269.png 432w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM-1920x1198.png 1920w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM-500x312.png 500w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.24.07-PM-800x499.png 800w\" sizes=\"(max-width: 775px) 100vw, 775px\" \/><\/a><figcaption id=\"caption-attachment-11593\" class=\"wp-caption-text\"><\/a> Source: (OECD)<\/figcaption><\/figure>\n<p>When <a href=\"https:\/\/www.investing.com\/analysis\/6-top-stocks-to-buy-as-consumer-confidence-hits-6month-high-200426090\">consumer confidence is strong<\/a>, people are more likely to spend the money they\u2019re earning\u2014especially on major purchases like a house.<\/p>\n<p>However, even in times when home values trend upwards overall, prices could remain stagnant or fall in some parts of the country due to other factors.<\/p>\n<h3>2. Inventory levels<\/h3>\n<p>Inventory, or\u00a0<a href=\"https:\/\/www.findwell.com\/real-estate-dictionary\/definition\/months-of-supply\/\">months of supply<\/a>, is the calculation of how long it would take for currently listed homes to sell out.\u00a0Let\u2019s say 100 homes sell every month and there are 600 homes on the market, that equals a six-month supply of inventory.<\/p>\n<p>In most markets, a six months supply is considered a balanced market\u2014meaning there\u2019s an equal ratio of buyers to homes for sale.<\/p>\n<p>Markets with a below six-month supply are considered low inventory, meaning there are more buyers than available homes\u2014making for <a href=\"https:\/\/www.homelight.com\/blog\/selling-in-a-sellers-market\/\">seller\u2019s market conditions<\/a>.<\/p>\n<p>Above a six-month supply and you\u2019ve got <a href=\"https:\/\/www.homelight.com\/blog\/selling-in-a-buyers-market\/\">buyer\u2019s market conditions<\/a>, where there are more homes listed than there are buyers house hunting.<\/p>\n<p>What does this all have to do with home values? In short, high demand and low supply push prices up. Low demand and high supply have the opposite effect. If there are more homes than there are buyers, that puts downward pressure on prices, and vice-versa in a seller\u2019s market when homes are in tight supply.<\/p>\n<p>As a seller in a market with lots of houses for sale and low demand, it\u2019s more likely that you\u2019ll have to price competitively or face a price cut down the line.<\/p>\n<p>\u201cOnce your house spends too many <a href=\"https:\/\/www.bankrate.com\/glossary\/d\/days-on-the-market\/\">days on the market<\/a>, say for 30 days or more, then usually there&#8217;s a price reduction to help it sell\u2014and that is just bringing down the value of your home,\u201d says Geraci.<\/p>\n<h3>3. Market cycles and consumer behavior<\/h3>\n<p>Looking at current market trends also helps in predicting the future of home values. The Federal Housing Finance Agency tracks these trends among single-family house prices with the <a href=\"https:\/\/www.fhfa.gov\/DataTools\/Downloads\/Pages\/House-Price-Index.aspx\">House Price Index<\/a>.<\/p>\n<p>And while home values <a href=\"https:\/\/fred.stlouisfed.org\/series\/MSPUS\">historically trend upward<\/a>, they\u2019re known to fluctuate or fall in the short term.<\/p>\n<figure id=\"attachment_11596\" aria-describedby=\"caption-attachment-11596\" style=\"width: 1932px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM.png\" target=\"_blank\"><img decoding=\"async\" width=\"775\" height=\"347\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM-775x347.png\" class=\"attachment-content size-content\" alt=\"real estate property value - median sales price of houses\" srcset=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM-775x347.png 775w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM-768x344.png 768w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM-1536x688.png 1536w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM-64x29.png 64w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM-128x57.png 128w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM-192x86.png 192w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM-432x194.png 432w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM-1920x861.png 1920w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM-500x224.png 500w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM-800x359.png 800w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/Screen-Shot-2019-07-31-at-3.31.45-PM.png 1932w\" sizes=\"(max-width: 775px) 100vw, 775px\" \/><\/a><figcaption id=\"caption-attachment-11596\" class=\"wp-caption-text\"><\/a> Source: (FRED)<\/figcaption><\/figure>\n<p>\u201cWhen home prices start to fall, a lot of buyers wait out the market, watching the trends of these home prices going down, down, down,\u201d says Geraci.<\/p>\n<blockquote><p>\u201cSo, you need to hire an agent who\u2019s a local expert and really understands the trends in your particular neighborhood, because recent trends within the last four to five months can really impact your home\u2019s value.\u201d<\/p><\/blockquote>\n<p>And when buyers wait out the market, that results in fewer active buyers. And fewer buyers leads to higher inventory, and lower home values.<\/p>\n<p>When it comes to real estate, what goes down, must come up. If your home value has recently decreased, analyzing home value trends can indicate how long it will take for it to rise again.<\/p>\n<h3>4. Interest rates<\/h3>\n<p>On the surface, it seems like mortgage interest rates only matter to home buyers, but home sellers need to take note, too, because <a href=\"https:\/\/www.investopedia.com\/articles\/mortgages-real-estate\/08\/interest-rates-affect-property-values.asp\">interest rates can impact home values<\/a>.<\/p>\n<p>There are a number of nuanced reasons why interest rates impact home values that involve <a href=\"https:\/\/www.investopedia.com\/articles\/mortgages-real-estate\/08\/interest-rates-affect-property-values.asp\">capital flow and lender risk<\/a>. However, the easiest way to understand this influence is again through the <a href=\"https:\/\/www.thebalancesmb.com\/real-estate-supply-and-demand-2866979\">basic principle of supply and demand<\/a>.<\/p>\n<p>A lower interest rate allows more of the buyer\u2019s monthly payment to go toward the principle, which means they can afford to buy a higher value home. A higher rate means a higher mortgage payment, which reduces the purchase price they can afford.<\/p>\n<p>For example, let\u2019s say that a buyer can afford a $500,000 home at a 4% interest rate. Well, if they can only get a 5% mortgage rate, that\u2019s an extra $50,000 going toward interest instead. So, your buyer can only afford a $450,000 home at that 5% rate.<\/p>\n<p>In essence, a 1% rate hike increases the cost of the house by 10%.<\/p>\n<p>The higher interest rates rise, the fewer buyers there are who can afford to buy a house\u2014because it eventually becomes <a href=\"https:\/\/www.homelight.com\/blog\/rent-vs-own\/\">cheaper to rent instead<\/a>.<\/p>\n<p>When buyers drop out of the market, inventory rises. And as inventory rises, home values fall.<\/p>\n<figure id=\"attachment_11599\" aria-describedby=\"caption-attachment-11599\" style=\"width: 700px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/57.jpg\" target=\"_blank\"><img decoding=\"async\" width=\"700\" height=\"350\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/57.jpg\" class=\"attachment-content size-content\" alt=\"real estate property value\" srcset=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/57.jpg 700w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/57-64x32.jpg 64w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/57-128x64.jpg 128w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/57-192x96.jpg 192w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/57-432x216.jpg 432w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/57-500x250.jpg 500w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><figcaption id=\"caption-attachment-11599\" class=\"wp-caption-text\">Source: (Sean Pollock\/\u00a0Unsplash)<\/figcaption><\/figure>\n<h3>5. Investor activity<\/h3>\n<p>Agents may keep an eagle eye on all of these macro factors, but real estate investors keep an even closer watch on these numbers because they\u2019re investing cold, hard cash.<\/p>\n<p>That\u2019s why the best agents pay close attention to investor activity, too.<\/p>\n<p>\u201cThere are a lot of factors playing into home values that most home sellers don\u2019t even think about, like investor activity,\u201d advises Geraci.<\/p>\n<p>\u201cYou don&#8217;t see a lot of investors flipping or buying properties right now, because they&#8217;re waiting to see what the market&#8217;s going to do.\u201d<\/p>\n<p>Just like buyers and their agents, investors are calculating how the economy, interest rates, inventory, and other factors are influencing home values.<\/p>\n<p>Only they take their estimations one step beyond how much a property will cost and run the numbers based on how much income a property will generate\u2014which is known as the <a href=\"https:\/\/www.investopedia.com\/terms\/i\/income-approach.asp\">income approach<\/a>.<\/p>\n<p>If an investor can\u2019t make significantly more in rent per month than they\u2019ll pay on a mortgage payment, they won\u2019t buy.<\/p>\n<p>Fewer investors means fewer buyers, higher inventory, and lower home values.<\/p>\n<h2>Top 5 micro factors that influence real estate property values<\/h2>\n<p>Assessing all of the macro factors that impact home values is valuable, but doing so can only tell you so much about how much your home is worth.<\/p>\n<p>If you need more than a ballpark <a href=\"https:\/\/www.homelight.com\/home-value-estimator\">estimate<\/a> for your home value, you\u2019ll need to take a closer look at the micro factors that influence house prices on the local level.<\/p>\n<figure id=\"attachment_11602\" aria-describedby=\"caption-attachment-11602\" style=\"width: 700px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/62.jpg\" target=\"_blank\"><img decoding=\"async\" width=\"700\" height=\"350\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/62.jpg\" class=\"attachment-content size-content\" alt=\"real estate propery value\" srcset=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/62.jpg 700w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/62-64x32.jpg 64w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/62-128x64.jpg 128w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/62-192x96.jpg 192w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/62-432x216.jpg 432w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/62-500x250.jpg 500w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><figcaption id=\"caption-attachment-11602\" class=\"wp-caption-text\">Source: (Aleksejs Bergmanis\/\u00a0Pexels)<\/figcaption><\/figure>\n<h3>1. Comps<\/h3>\n<p>Comps are <a href=\"https:\/\/www.bankrate.com\/finance\/real-estate\/comps.aspx\">comparable sales<\/a> (the closed sale price of homes recently sold in your neighborhood), and they serve as the foundation for the unique <a href=\"https:\/\/www.investopedia.com\/terms\/c\/comparative-market-analysis.asp\">comparative market analysis<\/a> (CMA) they\u2019ll create to help determine the right list price.<\/p>\n<p>What do <a href=\"https:\/\/www.homelight.com\/blog\/comps-for-my-house\/\">comps<\/a> have to do with your home\u2019s value?<\/p>\n<p>Products are only worth what consumers are willing to pay for them. That\u2019s why comps focus on sold homes, not the prices set your competition for their currently listed houses.<\/p>\n<p>This is an important distinction. Current list prices only indicate how much your neighbors want for their houses. Sold prices tell you exactly what buyers were recently willing to pay for other homes similar to yours.<\/p>\n<p>Think of it this way: There\u2019s no way to know if your competition\u2019s agents have done the legwork to determine the right list price.<\/p>\n<p>To be considered a viable \u201ccomp,\u201d a property must be \u201ccomparable\u201d to yours in location, size, age, and condition.<\/p>\n<p>When a home was last sold also plays a role. Ideally, you only want to look at similar homes that have sold in your area\u00a0<a href=\"https:\/\/www.trendmls.com\/Guest\/News\/ShowDoc.aspx?id=5314#.WnPrjJM-fBI\">within the last six months<\/a>.<\/p>\n<h3>2. Location<\/h3>\n<figure id=\"attachment_11598\" aria-describedby=\"caption-attachment-11598\" style=\"width: 700px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/56.jpg\" target=\"_blank\"><img decoding=\"async\" width=\"700\" height=\"350\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/56.jpg\" class=\"attachment-content size-content\" alt=\"real estate property value\" srcset=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/56.jpg 700w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/56-64x32.jpg 64w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/56-128x64.jpg 128w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/56-192x96.jpg 192w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/56-432x216.jpg 432w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/56-500x250.jpg 500w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><figcaption id=\"caption-attachment-11598\" class=\"wp-caption-text\">Source: (Hermann Schmider\/\u00a0Pixabay\u00a0)<\/figcaption><\/figure>\n<p>Consider this tale of two houses. Both homes have three bedrooms, two baths, beautifully remodeled kitchens, and big backyards. However, one home is located on a quiet cul-de-sac, while the other is situated on a busy corner and backs onto a freeway.<\/p>\n<p>Which home would you pay more for?<\/p>\n<p>Most buyers are likely to make better offers on the cul-de-sac home\u2014and the more they\u2019re willing to pay, the more it\u2019s worth.<\/p>\n<p>Other factors that make for a \u201cgood location\u201d include being located in: a good school district, an area with low crime statistics, or near amenities, like the beach or shopping centers.<\/p>\n<p>The more desirable the location of your home is, the more buyers you\u2019ll have making offers. Offers lead to bidding wars that drive up your home\u2019s value.<\/p>\n<p>\u201cExpert agents know to pull comps from within a one or two-mile radius because that\u2019s the best way to determine how the neighborhood impacts home values,\u201d says Geraci.<\/p>\n<h3>3. Home size, age, and layout<\/h3>\n<p>So, your agent wants to list your house at $375,000\u2014but you\u2019ve checked out recently sold homes online and found out several neighbors sold at $410,000.<\/p>\n<p>Interest and inventory rates are low, buyer demand is high\u2014what gives?<\/p>\n<p>\u201cAgents look deeper than the location and listing photos to find comps, they\u2019re also looking for similar home features, like the number of rooms, and square footage,\u201d advises Geraci.<\/p>\n<p>It\u2019s not enough that a comp is nearby, it also has to be similar in age, lot size, square footage, number of baths and bedrooms, and even layout.<\/p>\n<p>So, if your neighbor\u2019s house is newer, has a bigger backyard, an extra bedroom, a bonus half-bath, and a <a href=\"https:\/\/www.thespruce.com\/what-is-an-open-floor-plan-1821962\">trendy open floor plan<\/a>, it only makes sense that it\u2019s valued higher than your home.<\/p>\n<figure id=\"attachment_11600\" aria-describedby=\"caption-attachment-11600\" style=\"width: 700px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/58.jpg\" target=\"_blank\"><img decoding=\"async\" width=\"700\" height=\"350\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/58.jpg\" class=\"attachment-content size-content\" alt=\"real estate property value\" srcset=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/58.jpg 700w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/58-64x32.jpg 64w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/58-128x64.jpg 128w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/58-192x96.jpg 192w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/58-432x216.jpg 432w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/58-500x250.jpg 500w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><figcaption id=\"caption-attachment-11600\" class=\"wp-caption-text\">Source: (Daniel Barnes\/\u00a0Unsplash)<\/figcaption><\/figure>\n<h3>4. Property condition<\/h3>\n<p>In some cases, two homes that are absolutely identical in age, size, layout, and even location, can have vastly different values\u2014all because of their differing conditions.<\/p>\n<p><a href=\"https:\/\/www.century21.com\/glossary\/definition\/deferred-maintenance\">Deferred maintenance<\/a> is one major factor that can drain your home\u2019s value.<\/p>\n<p>Let\u2019s say that you are consistently diligent about completing your <a href=\"https:\/\/www.hud.gov\/sites\/documents\/DOC_12334.PDF\">home maintenance checklist<\/a> every year. You have your HVAC seasonally serviced, and have your roof inspected once a year.<\/p>\n<p>As a result, your 15-year-old HVAC is still chugging along, you\u2019ve repaired your roof before it had a chance to leak.<\/p>\n<p>Your neighbors, on the other hand, have deferred their home maintenance, and now both the HVAC and roof need replacing.<\/p>\n<p>Guess whose home is worth more now? Yours.<\/p>\n<p>Any updates and upgrades you make to your home, like installing new appliances in the kitchen or remodeling a bathroom, also serve to improve its condition and its value.<\/p>\n<p>You don\u2019t need to do any major remodeling projects if you invest time and effort into <a href=\"https:\/\/www.homelight.com\/blog\/prepare-your-home-for-sale\/\">preparing your home to sell<\/a>.<\/p>\n<p>\u201cHow well your home has been prepared to sell impacts its value tremendously, \u201d advises Geraci.<\/p>\n<p>\u201cTake two homes that are the same age, and in relatively the same condition. If one house doesn\u2019t show well, if it&#8217;s cluttered, or hasn\u2019t been freshly painted, that going to bring the value down.\u201d<\/p>\n<figure id=\"attachment_11604\" aria-describedby=\"caption-attachment-11604\" style=\"width: 700px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/60.jpg\" target=\"_blank\"><img decoding=\"async\" width=\"700\" height=\"350\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/60.jpg\" class=\"attachment-content size-content\" alt=\"real estate property value\" srcset=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/60.jpg 700w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/60-64x32.jpg 64w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/60-128x64.jpg 128w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/60-192x96.jpg 192w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/60-432x216.jpg 432w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/60-500x250.jpg 500w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><figcaption id=\"caption-attachment-11604\" class=\"wp-caption-text\">Source: (Vita Vilcina\u00a0on\u00a0Unsplash)<\/figcaption><\/figure>\n<h3>5. Presentation and pricing strategy<\/h3>\n<p>Most homeowners who are curious about their home\u2019s current value are interested because they\u2019re considering selling and they want to know how much they can get from their equity.<\/p>\n<p>And while all of these previously mentioned macro and micro factors play a big part in determining your home\u2019s value, how much money you make from your home sale often depends on how good your agent is at pricing and presentation.<\/p>\n<p>Get the list price wrong, and you\u2019ll watch your home value slowly sink as you rack up too many days on the market.<\/p>\n<p>And even if you price it right, a poorly presented home will sit on the market for months on end. Remember, a home is only worth what you can get for it, and just like any product, if you don\u2019t package and advertise it properly, you won\u2019t get what it\u2019s worth.<\/p>\n<p>That\u2019s why so many agents recommend <a href=\"https:\/\/www.homelight.com\/blog\/home-staging-cost\/\">having your home professionally staged<\/a>, especially before any listing photos are taken.<\/p>\n<p>\u201cStaging can really help a home\u2019s value, even if it\u2019s outdated,\u201d advises Geraci.<\/p>\n<p>\u201cI recently had older clients who had a beautiful luxury property valued at over 1 million, but it was a little outdated with pink wallpaper and so on. Instead of replacing it, I had my stager modernize it with pillows and decor throughout the house.\u201d<\/p>\n<figure id=\"attachment_11601\" aria-describedby=\"caption-attachment-11601\" style=\"width: 700px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/61.jpg\" target=\"_blank\"><img decoding=\"async\" width=\"700\" height=\"350\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/61.jpg\" class=\"attachment-content size-content\" alt=\"real estate property value\" srcset=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/61.jpg 700w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/61-64x32.jpg 64w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/61-128x64.jpg 128w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/61-192x96.jpg 192w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/61-432x216.jpg 432w, https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/07\/61-500x250.jpg 500w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><figcaption id=\"caption-attachment-11601\" class=\"wp-caption-text\">Source: (Pixabay\/\u00a0Pexels)<\/figcaption><\/figure>\n<h2>How to value your home<\/h2>\n<p>Settling on the right list price requires both <a href=\"https:\/\/www.homelight.com\/blog\/housing-market-predictions\/\">assessing national real estate market trends<\/a> and knowing what\u2019s going on in your local market.<\/p>\n<p>To get all that, you\u2019ll need the assistance of an <a href=\"https:\/\/www.homelight.com\/\">agent who&#8217;s actively selling<\/a> homes in your neighborhood.<\/p>\n<p>\u201cGood agents don\u2019t just pull numbers out of their hats when they suggest list prices,\u201d says Geraci. <span style=\"font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen-Sans, Ubuntu, Cantarell, 'Helvetica Neue', sans-serif;\">\u201cIf you want to maximize the value of your home, you&#8217;re going to have to put some work into it. Even just little things as easy as new paint and carpet.\u201d<\/span><\/p>\n<p>No matter how highly you value your own home, there\u2019s no guarantee that it\u2019s actually worth as much as you may want for it.<\/p>\n<p>That\u2019s why hiring a great agent who understands how to gather and evaluate all of the hard data is vital if you\u2019re intending to sell. If it\u2019s worth less than you want, you need to be willing to work to <a href=\"https:\/\/www.homelight.com\/blog\/updates-that-increase-home-value\/\">increase its value<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When you think about real estate property values, national trends matter, but so does whatever\u2019s happening in your backyard.<\/p>\n","protected":false},"author":37,"featured_media":11597,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[320,330],"tags":[733],"class_list":["post-11524","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-add-value","category-house-value","tag-how-is-home-value-calculated"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.0 (Yoast SEO v27.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ 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