Real estate growth depends on many different factors including the strength of the market in general and the financial stability of those in both the real estate and financial sectors. It’s essential for a new investor to understand the factors influencing real estate growth in order to know when to buy and sell and when to maintain the current status quo.

That isn’t to say that changes in economic condition will not have a negative effect on real estate growth, but as anyone who has ever rented or paid a mortgage knows, regardless of the economy, rents and house prices continue to rise at an alarming rate. For the real estate investor, that is a plus, but for the consumer who must pay the higher prices for rent and mortgage payments, it’s a struggle. Real estate growth is a windfall for the investor whether it means being a landlord or a property buyer/seller.

Of course, some major economic changes can definitely make a difference in the real estate market. One of the major factors influencing real estate growth is the interest rate. For example real estate growth slowed substantially in the late 1970s and early 1980s when mortgage rates were close to 20 percent.

The real estate market didn’t stop completely, but it slowed to the point that many homeowners lost interest in selling their homes. Commercial real estate growth slowed more than that of residential property due to a slow down in new businesses. Fortunately, this is not a phenomenon that happens very often in real estate growth, and we have not seen it since the 80s.

With mortgage interest rates still less than six per cent in most places, real estate growth is still healthy. Of course, we know interest rates can change at any time, but there is no reason for us to think interest rates will reach 20 percent as they were in the late 1970s and early 1980s. Therefore, it’s reasonable to believe that real estate growth will remain strong.

The key is in the state of the economy and how investors handle it in order to keep the property values from decreasing. It means keeping up on their properties so they do not become run down and unusable, thus affecting property values in an entire subdivision. Investors and/or landlords must do their part to keep investment properties from suffering the same fate that residential properties do when there is a depressed economy.

The factors influencing real estate and real estate growth will always be with us, but we have the power and resources to overcome them thus eliminating any negative factors influencing real estate growth. In most cases, real estate doesn’t decrease in value, so investors are safe with their investments. Of course, it is important to keep your eyes open for market changes. Smart investors watch for market fluctuations to make wise choices about buying and selling real estate for profit.

It’s not difficult to understand why real estate growth continues in spite of the economy. When you look at it from an economic standpoint, when the economy is depressed, many people have difficulty paying their bills, which reduces their chances of saving money toward buying a house. However, they still need a place to live, so they must turn to renting a house or apartment thus increasing the need for rental housing. As the need for rental housing increases, so does the need for investors to buy rental properties that are already for sale.

During the last half of the 20th century, the real market continued its high rate of growth. As we entered the 21st century, the future prospects of real estate growth became more tangible. With interest rates currently still low, many people are buying homes, and thus keeping the market growth quite high.

For investors, interest rates mean more available properties for not only owner-occupied properties but rental units as well. Even investors are more likely to buy up properties when the interest rates are lower, because when the payments on their properties are lower because of interest rates, they can charge less for the property, thus increasing the chances of having good tenants who will stay for the long-term.

In spite of the economy, real estate has always been a market that suffered the least. The future prospects of real estate are favorable as well with no potential downturn in the industry projected. If you look at the past history and compare that to the future prospects of real estate growth, you will see why investors are flocking to buy into real estate.

The present real estate growth rate makes it a profitable one for investors because of low interest rates on mortgages yet a high rate of return on property sales. Of course, with projections of an increase in interest rates, we may see a slight decrease in the current rate of growth, but it will not be enough to create a depressed market for real estate investors.

As we weigh the future prospects of real estate, there is reason to be optimistic. As has been the trend in the past, the prospects of real estate remaining a highly profitable venture keep investors happy. Over the years real estate growth has continued to increase at a steady rate allowing new real estate transactions to keep rental prices from rising dramatically. As we look to the future, prospects of real estate growth look probable for the rest of the 21st and even beyond.

If you are careful, the growth potential of a real estate investment can set you up for life. Of course, to do that you must take care to make the right choices in the properties you choose and how you handle the investment after purchase.

It is well known that real estate is the type of investment that grows in leaps and bounds regardless of the economy. It is rare that a depressed economy will affect the growth potential in a real estate investment, though high interest rates on mortgages may have a temporary effect on its growth.

This only happens when the interest rates are high enough to affect the housing market as a whole, causing a slow down in all areas—residential and commercial, thus affecting the investors as well. After all, a real estate investment cannot make money for an investor if he has to pay 20 percent interest on the mortgage without being able to raise the rent to compensate.

On the other hand, when the market is steady, an investor can adjust rents to meet with the growing economy. Most people accept escalating housing costs as part of the economic growth of the country and don’t complain as long as it remains steady. For homeowners, it’s an advantage when housing costs escalate, but for the renter, it can be problematic.

Renters in some cases are paying as much as 40 percent of their income on housing costs, yet landlords are still looking for tenants to earn their rent in one week. If an investor wants to make money in real estate, he must either look toward providing more real estate for the middle-income family or look to investing in property that is geared toward higher income families.

Investing in real estate is a safe and secure venture because everyone needs housing, no matter what the status of the economy may be. Thus, in spite of a depressed economy, an investor does not have to concern himself about the growth potential of his real estate investment.

He or she may find that rents must remain slightly lower to attract new tenants or retain the old ones, but he will not lose money on his investment unless many people lose their jobs in a situation similar to that of the Great Depression. The likelihood of a repeat of that era is rather slim since people have learned from the experience and are insuring their assets.

The growth potential of real estate is a sound one though at times it will be slightly slower than other times. For investors, the growth potential in real estate works in their favor because they have the option of buying real estate to sell at a profit or buying it to rent and hopefully profit by being able to charge higher rent than the mortgage payment.

Over the past few decades real estate growth has continued to escalate, especially that of natural factors. What kind of natural factors can affect real estate growth? Many different types of natural factors that can affect the real estate market. Some of the many factors include:

Drought
Earthquakes
Floods
Hurricanes
Temperature Extremes
Tornadoes
Wild Fires

Other naturally occurring conditions that may affect real estate growth include many things that we cannot define within the scope of our knowledge. For example, real estate prices may simply change for no reason that is obvious, but these natural factors will cause other changes within the economy. Real has always increased in value as have the rice of rental units. We don’t know why that is all of the time—it is sometimes related to the strength of the US dollar against other monetary units or because of conditions occurring throughout the world.

In order to definite the effects of natural factors on real estate, one must know the economic conditions throughout the world since some of those economic conditions may affect the real estate growth rate in the U.S. That doesn’t mean if the United Kingdom faces a crash in their stock market it will affect the real estate prices in the United States, but if other factors come into play such as a weakening of the dollar against the pound and/or other currencies, it could indeed have an affect on real estate growth.

Unfortunately, during those times when the real estate growth rates slows in terms of real estate prices, the rental market continues to climb at an exorbitant rate. In many states apartment rentals have increased over 400% within the past 30 years while during the same period a house that once cost $20,0000 now costs over $100,000. Certainly no natural factors have affected the growth of real estate in those markets yet they have escalated in price.

It’s essential to look at all of the factors that may affect the price of real estate to understand how they tie in to one another. It is not one natural factor but a combination of natural factors that affect real estate growth. The affects of these natural factors on real estate growth can only be seen over time, and then only if there is a major effect. Real estate for the most part does not suffer the same effects as other markets do, thus no matter what happens within the economy, you real estate investment remains safe.

Real estate investments of any kind are good investments for the future of your family – rental property, personal residence, or the purchase of real estate you fix up and resell. Of course, the latter is not much of an investment in your child’s future except in a monetary sense, meaning you can put that money aside into a trust fund for the children to access later.

For many years, people have used real estate investments as a way to guarantee a child’s future. With the growth rate of real estate, there is little doubt that the trend will continue throughout this century and forward. No matter what happens with the economy, we know real estate is secure because of the need it creates. It can secure not only the future of your children but also that of your spouse if something should happen to you.

If you begin early enough, your child’s future will be secure if you make the right real estate investments. That means choosing properties that are going to increase in value rather than those in a severely depressed neighborhood that stands little chance of improvement.

Choosing a depressed property is fine but not one that is in a depressed neighborhood. You want something that can assure your child’s future is secure, and this type of property isn’t going to do that. Can real estate make your child’s future secure? It can if you choose to invest in properties that will increase in value over the years.

Learning how to use real estate investments is the key to your child’s future. It’s a lucrative venture if you plan and purchase carefully and can guarantee that your children will not have to worry about money if anything should happen to you. That means you must plan carefully and be selective in the properties you choose. It’s essential that you make certain you know the neighborhood where you are buying—look around the area to make sure you are not selecting property in an area that will not yield a profit.

When you invest in real estate, you are investing in a product that will continue to be an essential product for many years to come. Can real estate make your child’s future secure? As long as you make careful choices in properties, your child’s future will be secure because of your real estate investments. Continue on that line of thinking as you choose properties, and you won’t have to worry about making the wrong choices.

Real estate has always been a more stable market than securities, but it can be volatile in times of rapidly changing interest rates. On the other hand, real estate growth continues though on a smaller scale when economic conditions are less than favorable.

It is rare than the real estate market does not experience growth, though there are times the growth rate is less than other times. Real estate is one of the most secure investments that is available, and no matter what economical factors affect its value, it will never decrease in value unless it is a depressed neighborhood or the owner lets the property enter into severe disrepair. Under normal circumstances real estate will increase in value in spite of economical factors that affect the financial markets.

No matter what economical factors may exist, real estate is always a good investment whether for personal use or as an investment. Why does real estate growth escalate during the worst of economic times while the financial markets falter? Unlike the financial markets, real estate is always necessary whether it’s a home or a business.

Of course, existing economical factors may affect commercial real estate more than residential property and apartments. The reasons that residential real estate is affected less by most economical factors that affect other real estate are because people always need a place to live, whether they are buying or renting. Therefore, things that affect other financial markets and commercial real estate will not have as much of an effect on residential properties.

Any effect economical factors have on real estate, however, may have a huge impact on commercial properties. When the economy is depressed, fewer new businesses are opening, and those that are already operating are less likely to expand or make improvements to their current real estate holdings. Without improvements to existing properties and improvements to existing ones, there is likely to be a decrease in real estate growth within the commercial market.

Throughout history economical factors have affected the real estate market, though to a lesser degree than within the financial markets. For example, people may continue to purchase property no matter how bad the economy is as long as their income is secure. However, they may delay buying a new car, furniture, appliances, or other non-essential goods. They may also cut back on recreational travel and plan vacations closer to home.

It is important to look at the effect economical factors have on real estate and the potential for real estate growth. In order to make a sound investment, you have to go beyond the history of real estate growth and look to the economic indicators that have a direct impact on real estate growth.

There is no one factor that impacts the growth of real estate, but a combination of all of the economical factors within the real estate sector, including income, unemployment rate, inflation rate, and turnover of new businesses. All of these factors together determine the stability of your investment and how much of a return on your investment you can expect.

How do political factors play into the real estate picture? The state of the economy is frequently the result of strong or weak political leadership though not always. There may be a weak economy with high unemployment and prices, but if the mortgage interest rates are low, the real estate market will not suffer, and thus, it will be a sound investment for investors. It is rare that real estate growth slows because of the economic conditions within the rest of the economic sector, but it may experience less growth than it would if the entire economy were strong.

The effect of political factors on real estate can vary among states just as the state of the economy can differ between cities within a state. As the inflation rate rose from 1.97% in August to 2.97% in September, we see a trend that may have a detrimental effect on the real estate growth, especially with October’s unemployment at 4.7% for the second month in a row. Interest rates are currently remaining below 7%, but if that figure should increase, the real estate growth rate may decrease to accommodate higher interest rates.

During the current presidential administration, we have seen inflation increase substantially and unemployment remain far too high. More people are uninsured today than in the past, which also contributes to a weak economy. None of these factors thus far has affected the real estate market to the degree that one would expect, if at all.

The real estate growth rate of rentals, however, remains high, with renters often having to spend as much as 40% of their gross pay on rent. Are these fueled by political factors? Certainly with the money the government is spending on the war in Iraq, there is some concern over the effects on inflation and the strength of the economy.

As we draw nearer to a new election year in 2008, other political factors may present themselves as the country looks toward the possibility of a Democratic female president, while others are certain the Republicans are going to remain in power. What effect these political factors will have on real estate will not become apparent for at least another year when the election results close. In the meantime, we need to follow the political factors to determine what effect the current political factors may have on the security of real estate investments and real estate growth. Currently the market is still strong, and there is no reason to think it will not continue to be strong. The market is not volatile like other economic and financial markets, so it tends to stay reasonably strong, even when other markets are losing ground.