According to the Zillow Property Value Index, the average price of a home in the United States that falls into the middle-tier price range was $344,141 in April of 2022. However, the pricing will either be very more or significantly cheaper depending on the area. However, why? Several variables determine the value of houses in a region, but supply and demand are the most important ones to consider. Prices are expected to increase with a strong demand for properties but a limited supply. Prices will fall when there is a low demand for houses and a huge supply of properties on the market.
Expensive Real Estate Locations
There is an ever-increasing demand in many regions with the most expensive real estate. Still, the supply is restricted due to a lack of available space or rules that prevent the construction of residential buildings. The following are some of the variables that contribute to rising prices and increased demand:
Generally Pleasant Weather
Because it maintains nice temperatures throughout the year, a moderate climate is quite desirable. No more slogging through the snow, and no more sweltering heat! However, since there are only a certain number of locations where perfect weather can be found, there is a restricted supply of space, high demand, and often excessive costs.
Attractive Characteristics of the Surrounding Environment
Another aspect contributing to increased demand is desirable geographical features, such as well-known lakes, beaches, rivers, and ski resorts. One market that exemplifies this principle in South Lake Tahoe, which spans the border between the states of Nevada and California. In addition to being a popular location for golfing, gambling, skiing, and dining, it is also known for its gorgeous location on the shores of Lake Tahoe. What is the result? A typical house costs more than twice as much as the national average of $737,732.
Well-Regarded Schools
Real estate agents and homeowners selling their homes will often testify that homes located in school districts with a history of producing better test scores and that has earned a solid reputation for the quality of education typically sell for higher prices.
Cities That Are Doing Well
People are drawn to top-tier cities because of their excellent safety ratings, career prospects, and entertainment options. Additionally, these cities have an outstanding infrastructure. The cost of housing will go up when supply is inadequate to meet demand, whether because of a lack of available space or some other factor.
For instance, the city of Manhattan is a busy metropolis rich in culture, offers several professional options, and is home to many iconic buildings. However, space is scarce, and for a long time now, land-use rules have barred the construction of more residential buildings. As a direct consequence, the value of the average house has been progressively increasing over the years, going from $245,633 in 1980 to $753,782 in 2022.
Locations with Affordable Real Estate Prices
On the other side, some areas of the country have real estate prices much lower than the national average. If you want to make purchases that are on the less expensive side, pay attention to the following details.
Conditions That Are Less Than Ideal
When the weather in a region is not as pleasant as it might be, it usually affects the real estate market since it makes the location less appealing for most people. For example, the average property value in Alaska was around $314,278 in April of 2022, even though the state experiences colder temperatures than many others.
Absence of Any Attractions for Tourists
In addition, the demand for homes will be lower in smaller towns with no well-known tourist attractions or distinctive natural characteristics, such as lakes or beaches. Look for regions that aren't particularly popular yet but that you enjoy since this will help you locate lower rates. Because they will not be well-known or published in popular magazines, some investigation may be required.
Rural Areas
Last but not least, the usual price of a residence tends to decrease the farther one moves out from a city's core. "Less costly areas are often located farther out from their closest city and frequently offer less opportunities for entertainment, shopping, and eating," says Garrett Derderian, director of market intelligence at the real estate business Serhant.
