Governmental Forces

Causes of value fluctuations in real estate caused by physical and governmental forces include:

 

•Taxes

•Federal monetary policy

•Quality of schools

•Quality of governmental services

 

Government forces on value are usually obvious.  Some examples follow:

 

Taxes.  If property taxes, income taxes, or sales taxes (or all three) are particularly high in an area, people will tend to buy in other areas.

 

Federal monetary policy.  The federal monetary policy affects the availability of credit and interest rates that, in turn, affect demand.

 

Quality of schools.  The quality of schools is a common factor in the value of a property.

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