Factors in Strong Real Estate Markets: Income Growth
While homes in major cities across the country show huge gains in recent years, real estate experts say home value recovery is uneven throughout the U.S. Some of the factors in strong real estate markets include good schools, shopping, employment and recreation. But a study by trulia.com shows the biggest factor is income growth. Researchers with Trulia looked at vacancy rates, income, employment and population. They found income growth correlated to home value recovery throughout the country. In many cases, younger buyers want to buy in communities with great jobs. The biggest price jumps are in the entry-level real estate market segment, i.e. first time home buyers. According to an article by CNBC, some home prices will may recover until 2025. Of course, researchers looked at home prices at their pre-recession level, which was during the “housing bubble.” Not all homeowners bought homes at the peak of the housing boom, which means they have equity in their houses.
Investing in rural America
Although it might seem counterintuitive, it’s a great time to buy homes at lower prices in rural America. The article by CNBC points out one-third of homes surpassed their pre-recession peak values. Large metropolitan housing markets have already peaked, but real estate experts expect home value growth in the next 8 years in other areas. Although people tend to buy homes in areas with great jobs, there is also a trend for telecommuters and wealthy retirees escaping to the country. As more baby boomers seek serene country estates, the real estate value in rural areas goes up. Job growth doesn’t matter as much as higher income because not everyone creates wealth with their jobs. Some people who retire to the country supplement their income with dividend profits from stocks and other investment income. With greater technology and universal design in homes, it’s easier for people to age in place in remote communities as well as work from home.
Searching for the best location
When it comes to the best location for real estate, there are essentially 5 factors that come into play. A safe neighborhood, good schools, access to shops and entertainment, water or panoramic views and access to freeways and public transportation. A booming real estate market typically provides buyers with factors that improve their lifestyle. When buying in rural America, you achieve the goal of spectacular and serene views. When searching for a home to buy for your family or as an investment, consider the schools’ reputations. Even if you don’t personally send your children to school, renters or future buyers will care about the school district. According to an article by foxbusiness.com, families research homes based on location with school districts top on the list. The better the school district, the better the resale value. Likewise, people want to live near the parks, shopping, beach and any popular shops, places and restaurants.
A growing number of home buyers want to get back to basics by growing their own organic produce, spending more time with their children and living on the land. Land in rural America will likely appreciate at a steady pace for decades. Also, people living in suburban areas such as Columbus, Cleveland, and Pittsburgh grow weary of the traffic problems and infrastructure issues. They tend to gravitate to rural areas to get away from it all.
At Kaufman, we know our clients who invest in rural real estate consider the schools, shopping, job and income growth as well as community and social activities. For help finding an investment property, acreage or home for your family in Ohio, West Virginia and Western Pennsylvania, please contact us. Ask us about traditional listings and upcoming auctions for residential, commercial and land.
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