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Effect of natural factors on Real Estate growth
Posted by Lorraine Ross on March 27, 2008.specials { border: 8px outset red; };
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In addition to economic and political changes, there are natural factors that may have a small impact on real estate growth. The affect of natural factors on real estate depends mostly on the type of natural factor that is involved. Real estate is ordinarily a fairly stable market, not usually affected by other events in the financial areas, but these factors may affect real estate growth at certain points in the economy.
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.
Lorraine,
Very interesting post. This affected me directly just a couple of weeks ago. An out of town prospect asked me about the weather here in Cherokee County, specifically tornadoes, I told them they were very rare and not really a problem (which is true) Of course 2 days later a series of tornadoes ripped through the state almost tearing the roof off of the GA dome. You can believe I heard about that during our next phone call
Yes interesting!
This can earn as well as to burn.
Something very interesting to consider for our Lanzarote in Canary Islands. Also in the way you plan your advertising campaigns. Here the market was affected by Delta Storm. It was a soft movement but some of the potential clients are now afraid of strong winds in the island.
The north of Lanzarote is very windy and south market increasing faster.
Very interesting post and blog!
A prime example of such natural factors was the Tsunami which hit the booming property market on Thailand’s Islands such as Phuket and Krabi a few years ago, December 2004. While it affected only a quite small stripe at the coast, it stopped the property boom there for many many months. Many moved over to tsunami safe areas such as Koh Samui island, which took over as the luxury property target, and the small island is now covered with concrete.
However Phuket and Krabi, despite their natural beauty, will stay second choice as long as the people remember this devastating tsunami.
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