The Real Estate Cycle

The real estate cycle, like the business cycle, refers to the activity of the real estate market as it reacts to the forces of supply and demand.

Supply and demand.

When demand for a product, such as housing, exceeds the supply, the price for the product tends to increase. In real estate this period is often called seller's market. Higher prices encourage the suppliers, in this case homebuilders to increase production. As production increased, more of the demand is satisfied until a point is reached where production outperforms demand. At that point, prices begin to full and production will diminish until demand catches up with supply, and the cycle begins again. This period is called a buyers market.

Factors influencing real estate circles.

Mortgage funds.

The availability of mortgage funding affects both supply and demand for housing. In most cases the buyer does not have sufficient assets to purchase a house outright. Most housing is either built purchased with money borrowed. The availability and cost of this money directly affects both the supply and demand for housing. If a local area is experiencing prosperity there should be funds available to finance the construction and purchase of housing.

Population.

Demographics refer to a study and description of the population of an area. Demographics included such factor as page, education, gross income, disposable income, number of family members, and savings and spending patterns. Also studied are patterns of migration and establishment of employment centers.

Social attitudes.

A major factor that has impacted both the availability of housing and mortgage funding has been changing social behavior patterns of the population. In modern example is the increase in the portion of the population that is in its prime home buying years. Both baby boomers and their children are now seeking housing, which has been a major factor in demand for housing that has pushed up prices in the past decade. High divorce rates and a trend toward later marriages have also stimulated demand because there are few people per household.

Political activity.

Because the national government is the largest borrower in the country, its activities and have a huge influence on the economy. Deficit spending by Congress forces the government to borrow money, making less money available for construction and home loans. On the other hand, action by the Federal Reserve to loosen credit with rapidly increase capital loan money supplies.

Regulation.

This regulation takes the form of federal, state and local tax laws, environmental regulations, lending laws, local zoning and building codes. The vast majority of these laws and regulations have been created to protect the environment, promote public safety or to protect consumers from predatory lending practices. Predatory lending includes usury, deception and fraud. Individual home ownership is encouraged and the federal and state levels by the provision for the home mortgage interest deduction in the income tax codes. However, at the local level, properties are subject to property taxes. These taxes are necessary to provide local services such as streets, lightning, schools, fire and police protection. In some areas, communities have implemented a impact fees. Impact fees are charged to all new housing that is developed within the community and I levied to pay for community infrastructure.

Martin Lukac, represents, #1 Loans USA(http://www.1LoansUSA.com), a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more: info@1LoansUSA.com

---

Sell Your Home Without Paying Any Commissions

All of us know that real estate commissions can work... Read More

Negotiating the Real Estate Contract

Negotiation is the process of communication back and forth in... Read More

Boston Real Estate ? Choosing the Right Boston Real Estate Agent

As a successful Boston real estate agent, it always puzzled... Read More

Real Estate Development Marketing

A Specialist Article For Those Interested In Real Estate Development... Read More

Termite and Moisture Damage Not Reported

I have done so many appraisals where I saw obvious... Read More

Buying Houses at Discount Prices

Buying a house is the best way you can create... Read More

Investing In Land

Changing social trends point to a huge rise in demand... Read More

Estate Planning

Estate planning can enable you to control your property while... Read More

Real Estate: Choose a Realtor You Can Trust

Today's volatile real estate market involves complex laws and fluctuating... Read More

Cheap Homes For Sale In Great Towns

Good Homes Under $50,000? My wife Ana and... Read More

How to Become a Successful Real Estate Investor

Many folks dream of becoming real estate investors, but not... Read More

A Possible Bargain: Foreclosed Properties

In the superheated San Francisco Bay Area property market, foreclosed... Read More

Are You Trying to Hit a Home Run With Your Prospects Without Asking Them on a Date?

Real Estate email marketingDo you remember the old School girl/boy... Read More

Property Investing Secrets 6

Property Investing Secrets:What No One Ever Tells You-How Real Estate... Read More

Selling by Owner Escrow or Closing Checklist

Home sellers should keep on top of their pending sale;... Read More

Real Estate Investors Kick Away $1,000

Those new to real estate investing often fail to take... Read More

Selling by Owner Tips

Do strangers scare or intimidate you? If you're planning to... Read More

Coming to Las Vegas ? the Las Vegas Real Estate Boom

Nobody seems to be 'Leaving Las Vegas' anymore ? in... Read More

How to Decrease the Value of Your Own House

Owning a house is part of the American Dream. Depending... Read More

Why Property Investors can Crash and Burn

Many experts say you can't lose if you put your... Read More

Advantages and Disadvantages to Selling a House on Your Own

As with any business transaction, there are pros and cons... Read More

A $100,000+ Discount On Miami Condos

By this point and time, many people have heard about... Read More

How Do You Profit From O.P.P.?

In a previous article we introduced you to the concept... Read More

Land Subdivision - $1.2 Billion Dollar Developer Tells You How To Do It

Land subdivision is a bit like helping Mom slice up... Read More

5 Secrets for Surviving a Real Estate Market Downturn

History repeatedly serves to show us that the real estate... Read More

Buy FHA HUD Homes

FHA HUD homes are those dwellings that have been acquired... Read More

Secrets of Making Money from Real Estate - Part 4

Analyzing and finding the right property deals:Firstly read my other... Read More

Dont Get Stuck Having To Deal With The Sellers Household Hazardous Wastes - After You Move In!

I have a confession to make!I was just outside with... Read More

Odors Can Make or Break The Sale of Your Home

It's amazing how important the sense of smell is to... Read More

We Buy Houses Scams ? How to Spot Them and How to Avoid Them

There are many reasons why a home owner would want... Read More

European Second Home Prices Wilt in Drought

Spain and Portugal have suffered one of their worst droughts... Read More

Bubble, Bubble, Toil and Trouble?

We are selling our house. We have lived here for... Read More

Mechanics Lien on Your House

In many places you can buy a house and a... Read More