We all know that real estate prices are higher in urban than in rural areas, and highest of all in the affluent residential enclaves of our largest cities. But, how did these high prices get to where they are? In other words, what are the essential factors that cause real estate prices to rise?
This is an interesting analysis of the broader real estate market, seemingly well-researched and thoughtfully composed. Of his three conclusions, the Central Virginia region has all three – a Maturing Society, high concentration of wealth and lastly, the attraction to the coast. While we are about three hours away from Virginia Beach, our central location is a large factor in many of my clients’ decision-making process.
His summation –
In essence, real estate price appreciation trends are an example of how wealth (high household income–choice A) tends to beget more wealth (manifested, in this case, by rising real estate prices). Surprisingly, the absolute level of income and wealth (as opposed to changes in income levels) appears to have the most significant impact on real estate appreciation.