What factors lead to increase in house prices

[sac25274]

Can some tell me what are the factors that leads to increase in house prices in the market? I live in the Sacramento, and heard that houses in the area went up a few years ago because of the number of demands, which those high # of demands results from people moving in from the bay area and increase of immigrants (especially Hispanics). What are other factors? Your response would be appreciate. Thank you in advance.

Steve

[JJohnson1985]

Uniqueness and immobility are the two that make the biggest impact. It's simple supply and demand. When supply increases while demand stays the same, prices fall, and the opposite is true for supply decreasing. When demand increases and supply stays the same, prices also increase and the opposite is true.

Supply is affected by labor force, construction costs, government controls, and financial policies.

Demand is affected by population, demographics, and employment and wage levels.

This is very basic.

[Waterfront Specialist]

If you are thinking of selling your home, keep in mind that buyers appreciate a clean look for your homes view. You can increase the value of your home making a few simple improvements. Keep clean your carpet and wash walls & floors with cleaners.

[jamesww]

Really there are only three classes of things that drive prices up. Below they are listed.

1. Buyer's Perception of Scarcity - This one is the biggest and can at times seem to be for no sensible reason.

2. Affordability - Either by a reduction in interest rates or a rapid increase in the median earnings of an area.

3. Increases in commodities used in the construction of homes

[100kRealEstateCoach]

Supply and demand is the normal rule of thumb. However, in these days and time you have to weigh what's going on with the government and the current lending policies. One could argue that this is a direct variable involved with supply and demand. I argue that it's important enough to watch very carefully over next couple of years. Agents are going to have to be very flexible during this time of change in our country. The name of the game is survival. Good to you.