What really drives prices in Real Estate?

  Everyone knows that if you have a house in a great location, let's say on a pretty cul-de-sac with lots of trees and just a few neighbors in a town with a great school system and easy access to transit, then that house would be worth more than a house that backs up to the train tracks on a major street in the same town.  As you've probably heard that's the old maxim, location, location, location.

   So the second house would take longer to sell right?  Well, not necessarily.

   Real estate, like any other commodity is driven by consumer demand, in other words, the potential buyers are the one's who drive the prices.  We have recently seen the prices in the stock markets all over the world drop.  The simple reason is that more people are keeping their money in liquid assets; therefore, they are removing their money from less liquid markets and causing prices to drop.

   In any market, it is the buyer's who drive the prices, even in a seller's market.  So the best way to get the best price in a falling market, of any kind, is to price the commodity, i.e. your house, where the buyer's will feel that it has the best value.  So, if the house on the train track is priced where the buyer still feels that they are getting a good value, then it will sell before the house on the pretty cul-de-sac.

  Reprinted from Alberta Ceres-Buda's blog