What drives property values in to move up and down?

Over time, the worth of a house will fluctuate up and down. House values appreciate in the long term in most cases. But, in real estate there is always a certain amount of risk.

When your property appreciates you have a larger asset to borrow against, and you'll generate a higher profit when you sell. But how can you be sure what you're investing in right now will appreciate over time? Property values in shift for a variety of reasons. It's imperative that you go with a real estate agent in who knows the factors that affect local prices.

A lot of people think that the economy is the greatest factor impacting real estate appreciation. Obviously, interest rates, unemployment, business growth, government programs and several other national factors have a noticeable impact on your house's worth. However, your home's value and the things that play the most significant role in its appreciation are specific to the local economy and housing market.

Location in a community - Convenient access to schools, work and amenities like shopping, restaurants and entertainment is a big deal to a lot of families and will greatly influence home values. So those areas often appreciate, or carry their value, best.

Recent sales - Your real estate agent should provide you with figures on the recent real estate sales in the areas that you'd like to live in. You'll want to know average time on market, selling versus listing price and more.

The appreciation history - Is the community thought to be desirable because of its location or affordability? Have house prices gone up or down over the past 5-10 years?

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