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Forces Behind The Real Estate Market

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In the world today, most people’s wealth is to be found in real estate. This is true to America, where majority of Americans have their wealth tied to the real estate. Real estate is a promising investment. Many investors are lured to the real estate because it is a lucrative, and promises of good returns in investment. But what exactly drives the real estate market? Four main factors can be singled out: economy; government regulations; interest rates; and demography.

Role of government in real estate

Forces Behind The Real Estate Market

Government plays a considerable role in the real estate market. Policies and regulation passed by the law makers will either depress the property market or make it vibrate. Measures like tax credits, deductions, and subsidies augers well for the real estate.

An example is the first-time home buyer tax credit introduced by the united state of America government in 2009. This incentive was to encourage home sales in a sluggish economy.  The outcome of this move was an increase of 900.000 home buyers; this is according to National Association of Realtors (NAR).

Real estate and economy

How well the economy also affects the value of real estate.  The wellness of economy is measured by factors like gross domestic product, employment data, manufacturing activity, the prices of goods and services. Read the full story


September 2011
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