Pressures That Dominate Real Estate Value

[Janos Sztojka]

When people usually think of real estate value they think of two forces; supply and
demand. Yes, this is correct; however supply and demand only fall under the one of the
four main categories that drive/depress real estate value. Supply and demand fall under
the economic category of influences in real estate value. The other three include; social
impact, government subjection and environmental forces.

When looking at social impact, there are a few things one would want to consider
determining the effect it will have on real estate value. Most of all the value would
fluctuate accordingly with population characteristics. This tie into the potential for
demand in the economic section of value; the more demand, the more value a property can
derive. Population however should be looked at in more depth by breaking down the sample
by age and gender, rate of household formation and partition, as well as analysis of the
social values such as education, law and order, and lifestyle preferences. Careful
consideration of these factors will help establish trends in what would be reflected in
real estate values.