Wilson County has seen several new home construction projects recently approved. Local residents may wonder about their current home values and how they will be affected. The answer is… It depends!
Choice and Competition
The first television was sold to the public in 1939 for $445. The average household income was $35 per month at the time. When adjusted for inflation, that television would cost $9,433.90 today! How many people are willing to pay that much for a television?
So what changed? Competition accounts for part of the cost decrease over time. Basic economic theory suggests that a large supply makes values go down. When there are fewer buyers willing to purchase than there are products to sell, suppliers are forced to drop the price to attract the buyer and encourage a sale.
In real estate, a large supply happens when there are more houses listed for sale than buyers willing to buy those houses. Buyers are able to bid down prices and sellers are more willing to accept lower offers as it might be the only offer they receive. Over time, an oversupply of housing can cause value to drop across your niegborhood.
Don’t get discouraged yet! An increase in housing supply is only part of the equation!
The demand for housing holds its own weight among home values. If an area experiences a population boom, the demand for housing will increase. Great school districts and new employers are a couple of examples that contribute to reasons why people will relocate to a certain area.
In this scenario, new home construction is actually needed to meet the new higher demand for housing. As long as the demand remains balanced with home supply, the value of local properties will not decline. In fact, there’s a good chance home values will rise. New development boosts the desirability of an area.
Another factor that affects housing demand is the homebuyer’s purchasing power. Buyers’ ability to qualify for a mortgage loan is affected by interest rates, job market stability, and wages.
So What is My Home Worth?
With so many factors contributing to the value of existing homes, it is important to understand how new home construction can impact your home’s value.
The most reliable way to know the true value of your property is through a comparative market analysis. Team Rockensock can help with our home valuation report.
Team Rockensock also posts local real estate market updates monthly. Follow us on social media or subscribe on YouTube to stay in-the-know!