Real estate pricing

Real estate pricing deals with the valuation of real estate and all the standard methods of determining the price of fixed assets apply.

A townhouse in Brooklyn Heights in New York City.
Willowood Townhomes in Salinas, California.
A building under construction in downtown San Jose, California, in the heart of Silicon Valley. The San Francisco Bay Area is one of the most expensive real estate markets in the US
Urban decay, as seen here in Harlem in New York City near 125th Street, involves declining real estate prices.
The Embarcadero in downtown San Francisco was once the site of a double-decker freeway with cardboard boxes housing the homeless underneath. In the early 1990s, however, the Embarcadero was the site of significant redevelopment efforts, sparked by both the destruction of the freeway by the 1989 Loma Prieta earthquake and rising real estate prices. Today, the Embarcadero serves as one of the San Francisco's most prominent flagship boulevards.

The median home price is one of the most common measurements used to compare real estate prices in different markets, areas, and periods. It is said to be less biased than the mean (average) price since it is not as heavily influenced by small number of very highly priced homes.

Rents and prices are often expressed per square foot or square metre to act as a basis of comparison.

Home prices are limited by various factors, such as the incomes of potential buyers, the cost and ability to construct new property to increase supply, and demand for rental units. Since eighty percent of all homes purchased are purchased with a mortgage,[citation needed] the ability to make payments, borrow money, and the cost of borrowing money are major influences limiting how far prices can rise before hitting resistance due to prices hitting levels where potential buyers are unable to qualify.[who?] In general the ratio in the US are home values at 2-4 times annual income levels.[citation needed]

See also

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References


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