10 Easy Ways to Increase the Final Market Price of a Home

Real estate has a record of increasing in value over time, but there are simple things that a property owner can immediately do to increase the eventual sales price of a home.  The final sales price of a home is determined by factors that are common to all properties like: number of bedrooms, number of baths, size of rooms, square footage, etc.  However, the actual sales price of the home will be established when the buyer and the seller come to a mutual agreement as to the actual dollar amount.

This being the case, it is possible for the seller of the property to do a number of simple tasks that can, and probably will, increase the actual dollar amount that the buyer is willing to pay.  What are these things and how expensive will it be to complete or finish them?  Before we examine 10 relatively easy things the seller can do to increase the marketability of the property as well as the ultimate sales price of the house, let’s put our “buyer’s hat” on.

The price of a property is a factor of the Supply/Demand function.  If you can increase the demand, then the price of a home will increase.  How do you increase the demand?  It’s simple, you must operate on the fact that BUYERS BUY BENEFITS!  If you want to increase the number of potential serious buyers, you must illustrate the benefits of the property to the buyers.  The way you can do this is to put yourself in the mind of the buyer.  Ask yourself, “What are the things that would make you want to buy this property?”  Start thinking like the buyer as you walk through your own home.  Forget the fact that you’re the owner and have to fix any problems you see.  Look at the things you can do to make the property more appealing to all the potential buyers.  Here are 10 Easy Ways to Increase the Final Market Price of a Home.


Easy Way #1 – Start at the Gate

Remove any and all miscellaneous trash and junk.  Remember to look at the property as if you were just getting out of your car.  As the buyer, your first impression will factor into two different questions:  Would you want to own the property? And How much would you pay for the right to own it?  You want to ensure that the potential buyer is answering these questions positively.

Even if you have a special emotional attachment to old tools and the wheelbarrow that belonged to your father – get rid of them.  You want the first impression to be one where the buyer is imagining what he or she would do to enjoy the yard.  Take the time to clean up anything that could be considered to be clutter.  The more clean and uncluttered the property is, the better the first impression will be.

Highlight the entrance.  Even before the buyer enters the home, he or she will focus on the entrance to the house.  The cleaner and brighter you can make the front door and porch, the better impression you will make.  Once again, remove excess items from the porch like shoes, toys, and above all else – garbage.


Easy Way #2 – Improve the Curb Appeal

You want positive impressions and feelings when the potential buyer looks around the yard.  So, start by mowing the lawn and pruning the shrubs.  If your property needs some lawn sod to improve the first impression, go ahead and have it installed. Whatever steps you can do to improve the looks of the yard, the better off you will be.  If you need to hire some help from neighbor boys to make the yard look like something out of a magazine, it will pay huge dividends.

Pay special attention to the front of the house itself.  Does the house need painting or would it help if you just got a pressure washer from the rental store and hosed down the whole thing?  Once again, buyers buy benefits, and you want the buyer to see the benefit of a great looking house and yard.

After cleaning everything up and removing excess debris from the property, take a minute and look up and down the street and ask yourself, “What could I do to make the house look better than the houses of all the neighbors?”  We’re not talking about spending a lot of money, but rather just being conscious of how to improve the looks of the house and yard from the street.  Sometimes a little bit of money and some diligent work in the yard will pay huge dividends in the actual sales price of the home, and in the shortened time in selling.


Easy Way #3 – Clean, Sweep, Mop, and Clean Again

Start by removing any and all trash, and then do a survey of how you can clean the house as if it were a new home.  As a buyer, what would you notice about the cleanliness of the home?  Is there dust on the pictures?  Yes, you need to dust, sweep and vacuum throughout the house.  If there are bookcases, the books need to be straightened and lined up.  Furniture needs to be moved and straightened, after cleaning underneath.  Bedrooms must be immaculate with all excess items removed.

Now you need to get to the bathrooms.  Take the time to scrub and scour and make the toilets, showers, and tubs look as new as possible.  Clean the floors and baseboards.  Don’t forget to open the cabinets and clean and straighten.  If there are excess or old items, discard and trash them.

Next stop is the kitchen.  Appliances are key.  Start with the stove and fridge.  Even if you are taking the appliances with you, they are an integral part of the kitchen and they need to show as brilliant and clean.  Pay special attention to the cabinets.  Straighten the dishes and clean the doors.  Many people spend a little bit of money and actually paint the cabinets.  If necessary and if you have the money, new cabinets can sell the home as people spend most of their waking moments in the kitchen.

Finally, don’t forget the garage and storage areas.  They need to be cleaned and made to look as clutter free as possible.  Many people judge a home on the amount of storage space available.  You don’t want your storage areas to look cluttered and dirty.


Easy Way #4 – Do a Final Declutter

Throughout the cleaning process we have been consciously removing as much of the clutter as possible, but now we are looking at ways to maximize spacial perception.  When there is too much furniture in a room, the room looks small.  If you want the potential buyer to think the rooms are large and spacious, try removing some of the furniture.  Many sellers realize that they weren’t actually using the items they removed as part of the declutter process.

If you can declutter the closets in the bedrooms, you will find that the closets seem larger.  Clutter clogs up any room, and when you remove excess items from the room, everything seems larger.

The garage always seems to be a magnet for clutter, and now you want to get rid of as much of the clutter as you can.  Some sellers have realized that renting a small storage unit for a few months can actually be financially smart when they move their clutter from the house to the storage unit.  However, it doesn’t seem to take long for these same people to realize that they weren’t actually using the items they put into storage.


Easy Way #5 – Store Your Personal Memories

Buyers want to make the new home (hopefully your house) theirs.  They want their own memories.  If you have a ton of family photos occupying all the wall space, it might be time to pack some of the photos up and leave room on the walls.  You aren’t getting rid of the photos – only freeing up wall space.


Easy Way #6 – Brighten the House

You want to let in as much light as possible to the home.  Avoid heavy dark drapes that create depressing feelings.  Windows are designed to let in the light and you want as much light as possible.

Consider visiting the paint store and getting neutral color paints to cover the walls.  Paint isn’t expensive and can lighten the rooms of the home dramatically.  Avoid heavy colors like reds and dark blues. People have been found to be more positive when they are in light and bright rooms.  There is a reason why windows occupy most recovery rooms in hospitals. If your home is deficient in the amount of outside light you have, then consider using floor lamps and table lamps to give a bright and cheery effect.

In certain rare instances you may want to add a window to let in more light.  When you add windows, make sure you get professional help in order to avoid problems later on.


Easy Way #7 – Add Living Plants 

Nature is soothing and when you can add a limited amount of living plants in vases and pots within the house, it creates a feeling of comfort.  You can use plants to emphasize certain parts of the house that can positively impact the buyer.  Consider putting a few plants next to the fireplace.  It will draw positive attention to the fireplace.


Easy Way #8 – Use the Senses

Smell is an extraordinary sense in selling homes.  It can be a negative if you have stale smells in a home, like cigarette smoke or cooking bacon, but it can be a real positive if the smell is one that evokes positive thoughts.  Some years ago, most malls allowed cookie smells to be wafted throughout the malls.  Sales were great, but other store owners objected and malls quit allowing the baking cookies to be smelled throughout the entire building.  Today, you have that same opportunity.  Baking bread and cookies can be a delight when people enter the home to view it.

On the negative side, if you have any smells or odors permeating throughout the structure, you need to clean the walls and take the steps to get rid of unwanted smells.  Oftentimes, you might have to remove carpets and repaint to rid the house of the bad smells.  It also helps to air out the home and make sure you have good ventilation throughout.


Easy Way #9 – Create Extra Space

As we declutter the home, we give the impression of added space.  Now we need to increase this illusion whenever possible.  Avoid huge bulky furniture in decorating.  Too large furniture will make the room smaller.

It’s not recommended to start adding rooms to every home, but if you have a room that is presently a storeroom and is large enough to be a bedroom, you may have another option.  Maybe it would be wise to store the storage items in your new storage unit and turn the storeroom into a bedroom by adding a new window.  If there is not enough room for a full closet, consider using an armoire as an alternative option.

Throughout the house you want to create the feeling of a large space.  When people remodel loft areas in renovated buildings they leave the ceilings open.  High ceilings create the feeling of much larger space.


Easy Way #10 – Use Small Renovations

This final tactic is one that has to be weighed financially.  Some renovations are very costly and may not create any added value beyond the cost of doing the renovation.  The exception might be something like finishing a partially finished basement.  This would create added space to the home but should be done in a very professional manner.

You may want to update appliances and fixtures in the kitchen or bathroom.  These are two rooms that have a strong eye appeal. Whenever you update these rooms, make sure you use neutral colors and bring in lots of light.

First impressions are lasting ones.  If you want to improve the marketability of your home, then pay attention to the little details.  Simple easy-to-follow tactics like the above strategies can pay big dividends in finding more potential buyers, and when you have more buyers, the price you receive for the property should naturally increase.


Understanding the Pre-foreclosure Market

The pre-foreclosure market has a phenomenal potential for profit. This can be particularly true for people with very limited funds. Yes, you will have to learn a lot and apply what you have learned. Not a lot of people understand the market, so most areas have a very limited number of skilled competitors. Just purchasing a pre-foreclosure property is not understanding the market. Understanding the market is knowing what to buy and how to buy it right.

The first and perhaps most important key is to find people who don’t want the home. Perhaps they are going through a divorce or a financial crisis. The second critical key is to learn how to focus on pre-foreclosures that have substantial equity. To make the big money you will want to purchase the property “subject to the existing mortgage.” Basically, either the property has equity, or it does not. mortgages that are more than the value of the property can be purchased via a “Short Sale.”

The strategy to close pre-foreclosure deals is quite different where there is positive equity than where there is negative equity:

If the home has negative equity…

You will need to get the banks permission to accept your offer. You will also need cooperation from the current owner of the property. In other words, both the current owner and the bank must agree “in writing” to sell this home to you at a price below what is owed on the mortgage. The current owner will need to sign paperwork agreeing that they still owe the difference to the bank. Obviously, this can be scary to the current owner. Historically, banks have just written these debts off. However, they could go after the current owner at some point throughout their lifetime.

Banks don’t enjoy losing money. Banks only agree to do so when other options appear to be worse. In recent years the banks have speeded up the process of what is called a “Sort Sale.” The name means selling a mortgage “Short” of what is owed on it. Someone in the bank needs to sign off on the deal. Generally, Bankers are reluctant to sign off on a money losing deal because they are looked on as the one who lost money for the bank. Even today closing a short sale doesn’t lend itself to an easily duplicatable process. Hence, every deal stands on its own.

Nonetheless, if you are dealing with a smaller Regional Bank where you have access to the decision maker and or you are dealing with a cooperative “current owner,” you will want to move forward with passion! One last positive point about many Short Sales. Because, the process often takes over three months banks are not that concerned with deposits. They often ask only for a small deposit or don’t really monitor deposits closely. Hence, you may only need to get the funds or a buyer with the funds when the deal closes. There is one way to increase your Short Sale Opportunities and we will cover that next.

If the home has positive equity…

Once you understand the pre-foreclosure market you will want to look for, market to, and or try to find these “cash cow” opportunities. Nonetheless, you are likely to run into deals where there is negative equity. A wonderful thing about purchasing pre-foreclosure direct from the current owner is that you don’t need the banks permission. You don’t want to offend them, but you can close these deals without getting banks to sign anything.

However, you will want the current owner to sign the appropriate paperwork and those things will want to be witnessed and notarized. But, that’s just paperwork. Finding a home with positive equity can allow you to fund your actions with the equity itself. Understanding the pre-foreclosure market means knowing where and how to find the money you will need to close these deals. We will cover these in copious detail in our next installment entitled “Conquering the Pre-foreclosure Market.”

If you market effectively for pre-foreclosure, you will also get some opportunities for Short Sales.

The most critical thing to understand about the pre-foreclosure market is how to know a good deal when you see one. Most of that is just a math problem once you get past the people part. Further, much of the people part is a math problem also. So, let’s start there. Even a modest marketing effort will have you working with people who have received a “NOD (Notice of Default) letter.” Of those 60% will resolve their issue without losing their home. Some of those could have resolved their issue with money they received from you or your sources. You can make a healthy profit right here while you build a compelling future kingdom.

You are looking for two kinds of people. Anyone who has equity, more equity is better, and wants to save their home but is getting turned down with every effort from the traditional lenders, is an ideal candidate to borrow money from you and your sources. Also, anyone who has equity but “doesn’t want” the home is a candidate for you to make money.

If you really understand the pre-foreclosure market, you will know that it is worth learning and understanding due to the large profits you can make. Further, you will be of service to those in need.

Why the Holidays are a Great Time to Invest in Real Estate

Why the Holidays Are a Great Time to Invest in Real Estate

The holiday season can be a great time to pick up investment properties. Here are a couple reasons why you should push to make as many offers as possible during this time of year.

One of the biggest reasons is the amount of buyers in the market at this time. The holiday season is a busy time of the year and a lot of investors and retail buyers are not looking at properties. This means there is a lot less competition in the market during the holiday season.

Less competition in the market leads to properties staying on the market a little bit longer. This situation leads me to my next reason why the holidays are a great time to invest. It is the motivation factor of people trying to sell a property. When properties linger on the market longer than usual, sellers become a little more desperate and are more motivated to sell. This creates a great opportunity for us, because without a lot of buyers in the market, our offer may be the one they are waiting for.

To take advantage of this time of year, get your agents to really sift through the MLS for rundown properties that have been on the market for an extended amount of time, usually 30 days or longer. Also do your own marketing to get stressed-out sellers to come to you as well. The best time to make offers on properties is when there are less buyers and offers to compete with. You will be helping some stressed out sellers get rid of a property they are struggling with.

How to Use Market, Rental and Housing Statistics to Determine a Market

How to Use Market, Rental and Housing Statistics to Determine a Market

Statistics are used to identify market trends and to measure and evaluate the potential success of marketing programs. The most important statistics an investor should know are the rental and housing statistics. So, how does one use this data to determine a market?

According to current trends, the number people who choose to rent instead of buy properties has gone up. This, in large part, is due to the enormous wave of foreclosures that swept the nation after 2008 and the economic upheaval of the Great Recession. Because more people have decided to rent, the number of sales and the availability of properties has been impacted. Adjustments need to be made when this happens, from house prices to interests rates and transactions. One should look within these current statistics to find the market they should target. They need to identify the demographic and behavioral patterns within these statistics to make sense of which people to target. Focus on what problems can be solved and identify what the demographic needs. For example, those who rent spaces will most definitely rent, so they fall under the target market for rental homes or properties with a negotiable mortgage that would fit their income. The price and costs for housing and renting may differ a lot and the demand for certain properties varies from location to location, so these things should also be considered.

The fine point where all these people’s needs and wants meet in the middle is what should be identified and targeted, and a close observation of the behavior of this demographic will surely produce valuable data. The secret to successful marketing is to identify the target market accurately.

Determining Market Value

Determining Market Value

A key first step in real estate investing is determining the Market Value or ARV – After Repair Value of a property.

Criteria used by many real estate investors and professionals includes the following:

Properties that –

  1. Were sold less than 1 mile away
  2. Were sold less than 6-8 months ago
  3. Have square footage that is 20% more or less than the square footage of the property you are looking at. For example:
    1. If you’re looking at a property with 1,400 sf then your range is 1,200-1,600 sf.

You should be looking for 3-5 comparable properties that are as close as possible to the number of beds, baths and square footage you want. Also try to find the same style of construction, as it is difficult to justify comparing a single-story ranch style home to a multi-level property.

Look at both online sources and sources from real estate professionals. With that in mind, here is a 3-step process:

  1. Local real estate brokers and agents have a great source of market knowledge, especially for obtaining both the average price that properties are selling for and the average price per square foot that the same properties are selling for.
  2. “Paid Sites” has their advantage in that the software they have available pulls from both County Records as well as the Multiple Listing Service (MLS). Do your homework and look for online customer reviews and compare them with other websites with the same claims. Here is a short list of some of those sites.
    1. https://www.realquest.com/jsp/rq.jsp?action=switch&page=main
    2. You can also check with the MLS in your area and ask about the fee for their temporary/limited access for investors. This is a great tool to use for searching and evaluating properties and determining market value.

There are many others but these are quite adequate for getting started.

The Importance of Demographic Research

The Importance of Demographic Research

Demographics is statistical data relating to the population and the particular groups within it. It is the kind of information that makes working in the real estate world a pretty challenging feat. Also, it is an indispensable part of the business, since it plays a great role with marketing houses and properties.

How important is demographic research? Well, this research provides the data that describes the composition of a population, such as age, race, gender, income, migration patterns and population growth. These statistics are an often overlooked but are a significant factor in how real estate is priced, what types of properties are in demand, and who is interested in buying what. Major shifts in the demographics of a nation can have a large impact on real estate trends for several decades. For example, the baby boomers who were born between 1945 and 1964 are an example of a demographic trend which will likely influence the real estate market.

There are numerous ways this type of demographic shift can affect the real estate market, but for an investor, some key questions to ask might be: How would this affect the demand for second homes in popular vacation areas as more people start to retire? Will they be able to even find buyers for their homes if they do decide to sell their property? These and other questions can help investors narrow down the type and location of potentially desirable real estate investments long before the trend has started. Basically, the ever-changing results in demographic research determine the demands, prospective buyers and also the prices of properties. Who is buying what? Who is interested with what? Is it part of their priorities?

Know this important data in your market because the more information at hand, the better decisions you will make.

Why You Should Perform a Dead Deal Autopsy

Why You Should Perform a Dead Deal Autopsy

It is never too late to gain quality information from a DDA (Dead Deal Autopsy). However, somewhere between two-thirds and three-fourths of all deals are done after the original offer is turned down. Hence, resubmitting offers on a regular basis is great strategy to prevent a Dead Deal in the first place.

Gathering information about what could lead to future done deals or gaining a clearer understanding of why a deal was lost may be the “secret sauce” to success in real estate investing.

Obviously, when a deal is lost it can be invaluable to determine who got the deal, at what price and why. In almost every case, it is easy to find out who got the deal. Stopping by the property on lost rehab deals shortly after losing the deal could afford an opportunity to find out who now owns the property and just what kind of rehab they are doing. Getting business cards from contractors and sub-contractors is usually a snap, and the quality and speed of their work may be why you were outbid.

A little investigation could also uncover how the purchaser presented a higher bid but still made money. Maybe they saw how to open a kitchen, add a bathroom, or dynamically enhance the curb appeal.

Once you get in contact with the new owner, talk to them and see if they will share critical information on how they are able make a profit bidding higher than you. It is amazing the information people will share if asked.

On rental units, the concept is the same. Skilled investors will often show you how slight improvements to the rental units can make a large increase in the value of a property. For example, if rent can be increased by $100.00 a month, the property value goes up $10,000.00.

What you learn may not be what you want to hear but it will be what you need to know. If you do enough DDAs you will find there were cases in which you never had a chance. Your offer was only there to keep their favorite buyer honest. Wholesalers can lose deals to someone who just waits for your contract to expire.

In summary, mastering thorough DDAs will open doors to success. You will, one, meet the key people who can help you in the future and, two, understand how to correct your mistakes so you can win the next deal and make money on it.

Real Estate Demographics Research – Rental Rates

Real Estate Demographics Research – Rental Rates

There are many things that could affect the real estate market.  The main factors that forecast the trend in the real estate market are the economy, the population growth, the rates of interest for loans, and the demographics.  In fact, according to a study conducted in 2014, there will be an increase of demand for housing over the next few years.  The reason for the increase in housing demands is the surge of population growth.  Population growth depends on two basic components, natural and non-natural population growth.  Natural population growth is rate of live births that occur in the area.  Non-natural population growth refers to the migration of people in a place affecting the demand and supply for food, housing or other needs in that environment.

Demographics are defined as the study of a population’s characteristic. Age, sex, race, education level, economic status and other factors used by the government and private sectors for many purposes, such as forecasting and identifying the buying capabilities of a population on a regional or national basis.


Real estate researchers have forecasted the surge of population growth.  If the data from the research proves to be true, there are four generations in today’s market on the lookout for housing and two generations play a very significant role in the development of housing demands.  The economic capabilities of today’s population tend to favour more on rental rather than homeownership.  The recession has greatly impacted the demand for owning a property and the demographics show that many people are opting to rent rather than own.  Even property owners who had initially planned to sell their homes are renting them out instead because rental rates and high tax rates are lower for rental investors.


Since the current market is now recovering from the recession that lasted from 2008- 2011, unemployment rates are going down.  A lot of Americans now find themselves moving or migrating to areas where work is available.  This migration makes a lot of people choose to be practical by renting rather than buying a house.  There are certain cities across the country like Los Angeles and New York where rental rates are surging due to the demand for rental properties.  Even industrialized parts of these cities are transforming into residential areas to accommodate the ever-growing number of young people who want to live there.


Age is another demographic variable the greatly affects the rise in demand for rentals.  Young people ranging from 18-35 years old are the largest percentage of renters.  Traditionally, these young people would have become first time homebuyers as they advance in their careers.  They are predicated to choose renting versus owning due to changes that happened in the economy (recession, job loss, low-income).  Another reason young adults find renting a more attractive choice is that they don’t feel the need to be burdened with a mortgage loan.  Most young adults believe could not afford to own a house and face the financial obligation that it entails.

Demographics cannot be ignored because it greatly affects, if not, dictates the fate of business investments. The basic rule of supply and demand tells us if there is a high demand for a certain product, the more valuable the product becomes.  If there is a high demand for rentals in an area, the higher the rental rates become.

Demographic Research – Housing Inventory

Demographic Research – Housing Inventory

There are many statistics a real estate investor should pay attention to. One of those statistics is housing inventory. This statistic is commonly referred to as “months of inventory”. A simple definition could be, “The number of months it would take to sell all of the homes currently on the market.” For example, ten months of inventory would signify more of a buyer’s market, meaning more homes to choose from. Whereas four months of inventory would denote more of seller’s market meaning fewer homes for retail buyers to choose from. Knowing this statistic would help an investor tell where the market is and what strategy would be most beneficial.

One of the best ways to research the housing inventory is visiting www.realtor.org. This website is hosted by the National Association of Realtors (NAR). The NAR has an interest in gathering housing statistics so that REALTORS and other real estate professionals can keep their eye on housing movement. At the tops of the webpage you will see a tab entitled “Research and Statistics.” By clicking on this tab you will find many types of statistics including housing inventory.

Another resource to find these statistics is your states’ board of REALTORS website. You can find this website with a quick google search. The state’s Board of REALTORS will also keep tabs on housing inventory to help local real estate professionals. An investor is able to use this information to help in evaluating deals.

The previously mentioned techniques will give you good statistics. If you want local statistics, and you do want local information, you should turn to your real estate professional. A REALTOR who has access to the Multiple Listing Service (MLS) would be able to research housing statistics for an individual neighborhood if you need data as specific as this.  The data from the MLS is much more accurate and local than other resources you will find. Simply ask a REALTOR for the data on the current housing inventory. A good REALTOR will supply you with this information along with other statistics that will benefit your business.

Using the housing inventory statistic to determine the market is important for the investor. If we are in a seller’s market then a buy, fix, and sell strategy would be a good choice. Conversely, an investor in a buyer’s market would be better served using a buy & hold strategy. Therefore, the housing inventory statistic is key to determine the market we are currently in.

Appreciation Rates

Appreciation Rates

When investing in rental income properties, two sources of income come into play in determining an investor’s total ROI (return on investment).   One is the cash flow return on investment and the other is the appreciation rate of return.  The cash flow is determined by total income from rents minus all expenses and the appreciate is determined by how much the property increases in market value over time.  In many States throughout the Midwest and Central East a typical cash flow return might be 10-12% while the appreciation is only 2-3% creating a total ROI of 12-15%.  In other States, especially the west coast and sunbelt areas, the cash flow return may be much lower such as 6-8%, but the appreciation can be as high as 5-15% annually, creating a ROI of 11-23% depending on the state of the economy in those states.  These areas can also depreciate the same amount at times where the value of the properties drop dramatically.

Some investors are more interested in the cash flow return so that when house prices drop they still receive a good return on their investment.  Other investors speculate on house prices going up rapidly and aren’t as concerned with the amount of cash flow return on investment from rents because they are banking on making a great deal from appreciation.  This will be the case as long as prices are going up, but if the economy shifts and prices drop then those investors will not make out as well as investors who make sure the net rental income returns are healthy.

So, what effects appreciation rates in different areas.  The simply answer is supply and demand.  As more buyers move into a market place with the same amount of properties available, the prices will increase.  When people hold off on buying and lots of homes are being manufactured, the prices will start to come down.  Highly desirable areas, like sunbelt and coastal regions, attract more migration and higher demands when the economy in those areas is good and there are plenty of jobs.  Smaller towns, with harsher weather, have less growth and can even decrease in population as people move out to find more pleasant environments.  But these trends go in cycles with people moving to the fair weather States when prices are deflated and moving back out when prices become too expensive; opting for less pleasant weather as a trade-off for a lower cost of living.

Building trends also effect the economy.  When large builders stop developing new subdivisions because of a stagnant economy, supply lessens and demand eventual catches up with it.  Then as buyer’s confidence in the economy returns a buying frenzy can pursue driving the prices up rapidly in areas of high demand. The reverse also happens when builders start constructing massive subdivisions, adding a multitude of homes to the market, and the stock market drops or interest rate raise causing investors to become apprehensive of the future thus holding off on purchases.  Then prices can drop rapidly because supply out paces demand. 

So take appreciation into your financial scenario when determining the overall ROI of an investment, but remember that cash flow will continue pretty steadily in any area, whereas appreciate can fluctuate drastically in areas where it has a tendency to go way up or down.