The real estate market refers to the process of buying and selling properties, including land and buildings. The market involves various stakeholders, legal requirements, and financial considerations. It is influenced by both local and global events. For example, interest rates have a direct impact on property prices as they influence buyers’ purchasing power and investment decisions. Zoning laws and construction regulations also impact the demand for certain types of properties (Colliers International, 2021). New technologies and innovations can pose opportunities as well as challenges to the industry (Knight Frank, 2021).

Many factors drive real estate trends. Economic factors, such as GDP growth and employment rates, have a direct effect on the demand for property. Demographic trends, such as migration patterns and shifting household composition, can also influence the type of properties that are in high demand. Social tastes, such as the desire for status symbols and investments, can also influence property demand and values (e.g., the popularity of wood paneling in the 1970s).

Understanding real estate market trends allows you to make informed and confident property decisions. Whether you are an investor, broker, or homeowner, the knowledge of these factors can help you determine your negotiating and purchasing power. You can also anticipate and mitigate risks relating to changing real estate trends. Using tools like HouseCanary, you can gain access to neighborhood-level insights and market data to understand the factors influencing property values. In addition, you can use mortgage calculators to see how different interest rates affect purchase prices.