Real Estate Forecasts and Growth Maps. Basic real estate forecasts were not properly practiced in the housing crisis, or today in 2016. The actual population of the U.S. did not grow as fast as the builders added new homes, and this is part of the inventory problem today. So while it was reported that there were continual increases in resale values and new housing starts, what was ignored was the growing supply of homes in the colder climates, thus contributing to the over-building problem. Builders, lenders and realtors should have seen this growing inventory.
If they practiced smart real estate fundamentals the future effects of migration would have been seen, and realized a big problem was coming, but it was more fun to believe that the party would last forever.
Real Estate Forecasts and the pro-housing cult
Market fundamentals ultimately determine prices. However, the recent housing boom demonstrated the power of collective denial (on the part of builders, lenders, real estate agents, investors, etc.) and how the media can distort facts while helping fuel a misdirected trend. In addition to irrelevant comparisons and meaningless industry snapshots, the media literally became part of the housing boom when shows like Flip This House started appearing on television.
Real Estate Forecasts and Fundamentals of Real Estate Investment were on hold, and herd mentality set in. Everything on television and in the media seemed to scream, buy now before it’s too late. But the media neither created the housing boom nor purposely misled the public. In truth, real estate prices had been increasing by 9, 10, even 15% a year in many places but they had been barely keeping up with inflation in others.
With the reporting agencies and the media confused, the public was left without a reliable source of accurate, up-to-date information and analysis, something that is needed more than ever before. The Fundamentals of Real Estate Transactions and Lifelong Real Estate basic concepts were on hold.
Few investor or Real Estate Prospecting professionals looked at local demand factors. And for us, Growth Maps, and for many real estate investors, real estate fundamentals are also highly correlated to profits.
The ability to forecast future demand is critical to any business, and construction companies are no different.
What effects can be expected for the future of real estate prices in the next one to two years?
Migration, marriages, birth, and income growth are all factors that affect demand. Ideally, long-term demographic trends in these areas will mirror the number of new household formations and more accurately predict new housing starts and home sales. Tracked and analyzed properly, these factors can be used to predict true demand. Artificial demand, on the other hand, is fueled by these Media and marketing efforts by interested parties.
What matters most, and affects future price changes is local growth in demographic and economic data….or growth data.
Overall economic conditions (including availability of credit and financing) How many are investing in second homes or investment properties We have already discussed how the media itself can generate artificial demand by reporting facts in a vacuum and failing to give statistics any relevance or meaning. Advertising by realtor groups, big builders and lenders further compromises the objectivity of the media. With better real estate fundamentals and real estate forecasts, the investment in real estate, is a click away. If you have not done so already, please fill out the box on the right and
Will better real estate technology and real estate forecasts, the investment in real estate, is a click away. If you have not done so already, please fill out the box on the right and Get your free E-Book.
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