Real Estate Market Price is the price that is paid by the buyer to the seller at the time of transaction of the Real estate. Real Estate Market Price differs from Real Estate Market Value as The Real Estate Market Price is a historical fact during the transaction that cannot be changed later. On the other hand Real Estate Market Value is an ever changing and fluid concept.
A Real Estate market price is not always an indicator of the market value because:
- Family relationship can help the buyer to pay less than the market value.
- A transaction can be a part of a bigger consignment which can lead to a price cut.
- People can pay more than the market value if that makes his own industry earn some special privileges (mergers, take-overs etc.).
Real Estate Market Price is determined in various ways. Some of them are:
- Median Real Estate Market Price
- Mean Real Estate Market Price
- Real Estate Market price determined through Square Feet Measurement
Median Real Estate Market Price:
The Median Real Estate Market Price is the border line that divides the Real estate market into two equal halves. One half of the whole Real Estate Property is sold at a price higher than the Median Market Price and the other half is sold below it.
Mean Real Estate Market Price:
The Mean Real Estate Market price or average Real Estate price is the sum of prices of all the Real Estate property sold in a certain place in a certain period of time, divided by the number of Real Estate Properties sold in the same area in that period.
Real Estate Market Price determined through Square Feet Measurement:
Square feet measurement is the most convenient way to determine the Real Estate Market Price the price is dependent on square feet. The bigger it is the maximum would be the price depending on per square foot price. This is very useful to determine prices under different conditions and places.
Different Effects of Real Estate Market price:
Real Estate Market Price can have various effects like Urban Decline, Overcrowding, and Urban Renaissance. Lesser demand can make surplus supply which can have negative effect on the Economy. Cheap market price can make a place overcrowded which can have an indifferent effect in the economy. Higher land prices can have positive effect as natives will have higher profits for their properties.
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