Over time, the value of a property will fluctuate up and down. Home values normally appreciate in the long term. But, of course, there are no guarantees in real estate.
When a property’s value appreciates, the owner has greater ability to borrow against the asset. In addition, they will generate a larger profit when they sell the property. There are many reasons why Chicagoland property values rise and fall. So, how do you know if your property purchase will appreciate over time? It’s helpful to tap into the expertise of an experienced real estate agent who recognizes and understands the factors that affect local home sale prices.
The Economy – A lot of people are convinced that the economy is the #1 factor impacting real estate appreciation. Clearly, there are many factors on a national level that impact your property’s value: unemployment, mortgage rates, consumer confidence, and more. But, the most influential aspects that determine your property’s value are based on the local Chicagoland economy and residential market.
Are local businesses hiring? Are companies moving in to, or away from, an area? Is there a good combination of businesses in an area, or does the community rely on just one industry? Is the mix of commercial and residential zoning changing? Each of these factors play a role in the health of the local economy.
Location – Convenient access to the workplace, schools, churches, shopping, restaurants, and entertainment; are priorities to many of us and will greatly influence home values. So, when it comes to holding their value, these neighborhoods typically appreciate the most.
The Appreciation History – Is the neighborhood thought of as desirable because of its location or affordability? Have property prices gone up or down over the last 5 to 10 years?
Recent Home Sales – How fast are homes selling? Are sellers having to discount their price, or offer concessions? A lot of data can be retrieved from public records. But a good real estate agent, that’s affiliated with the local MLS, will often be able to provide a more complete picture.