The sum of money paid by the buyer to the seller at the time of purchasing the housing stock (in other words, the house) is termed as the Housing Market Price. Housing Market Prices - the term, needs to be understood thoroughly so that one does not confuse it with Housing Market Value. Housing Market Prices is a materialistic fact. And it refers to the hard cash or bank check paid by the buyer and obtained by the seller, at the time of a particular transaction and therefore cannot be changed at a later date. The Housing Market Prices does not necessarily reflect the actual Market Value of the housing stock, for it may take into account various special considerations.
Housing Market Value in contrast to Housing Market Prices is a fluctuating, fluid concept. It is basically an estimation of the sum of money that a house would fetch, if and when put up for sale. While calculating the market value of a house, we need to take under consideration the following:
- recent sales of houses in the local area
- the present condition of the housing stock
- a correct judgment of the Housing Market
In general Housing Market Prices can be determined in the following ways:
- Median Housing Market Price - where the median is calculated as the the price that divides the entire housing stock available in a Housing Market. One half is sold at a price higher than the Median Market Price and the other, sold below it.
- Mean Housing Market Price or Average Housing Market Price - the sum of prices of all the housing stock sold, divided by the number of housing stock sold, in a specific area within a given time period.
- Square feet measurement (the easiest possible method to determine the Housing Market Prices) - the rates are dependent on the measurement of the clear ground area of the housing stock in square feet.
The Factors which determine Housing Market Prices are:
- the demographic structure
- shift of working middle class population towards urban centers
- prosperity of the working middle class population
- rates of housing loan offered by banks
For the past few years Housing Market Prices have been rapidly rising all over the world. Housing Market analysts have however failed to say for sure whether this rise in prices of the housing stock are genuine or the result of unscrupulous manipulations.