Supply and Demand

Have you ever heard someone say "They're not making any more land!" They probably mean to say that since there's only a limited supply of land available, the price goes up as the supply goes down.

That IS the way prices are set on land and housing. As demand for housing in a particular area rises, with a limited supply available for purchase, prices also rise. If there is an over-supply coupled with little demand, prices will fall.

The location of land can also make a difference in the price the public is willing to pay. A home located near shopping, schools, and recreation in a growing city may bring a higher price than one located on the fringe of town away from family activities.

Another phenomenon of valuing real estate is the principle of "highest and best use." Under this concept a house on a corner lot currently used as a family residence might, if located near a business district, be worth much more as the location for a restaurant or other business if the house is removed and replaced with a commercial building.

You can imagine how many other factors might cause the value to change as well. Learning to place a value on homes and land is a skill learned from long experience. Don't leave the pricing of your home to chance. Use the skills of the best real estate agent available.