What causes home prices to fluctuate?

Property values are constantly moving up and down. Normally, home values appreciate in the long term. But, of course, in real estate there are no guarantees.

When your house appreciates you have a bigger asset to borrow against, and you'll make a greater profit when you sell. There are many different reasons why property values in rise and fall. So, how will you be sure what you're investing in this year will appreciate over time? It's critical that you go with a real estate agent in who recognizes the factors that influence local prices.

The economy is thought to be the major factor affecting real estate appreciation. After all, there are a handful of factors on a national level that impact your house's value: unemployment, mortgage rates, consumer confidence, and more. However, your house's value and the components that play the biggest role in its appreciation depend on the local economy and housing market.

Access to services - Being close to schools, jobs and amenities like shopping, restaurants and entertainment is important to a lot of families and will greatly influence home values. So those regions usually appreciate, or carry their value consistently, year to year.

Prior home sales - How long are homes up for sale before closing? What was the selling price compared to the listing price? Some information can often be retrieved from public records, but a good agent with a login to the local MLS will often provide a more complete picture.

Appreciation history - Have house prices increased or decreased over the last 5 to 10 years? Is the area believed to be desirable because of its location or affordability?

Local economy - Is there a good mixture of business in an area, or does it count on just one industry? Have businesses moved into or away from an area? Are local companies hiring? These items play a role.