Perception Plays A Major Role In The Real Estate Market And Housing Prices Real estate and the housing market is affected by the economy in general. Factors such as unemployment, interest rates, credit availablity, the stock market and the given demand and supply factors of a specific neighborhood, meaning housing inventory. Real estate is certainly in a downward cycle lately and this is due, course, by all the above. But there is another factor called: perception. Peception is the outlook or viewpoint of the population in general. It defines one's motivation to act. If everyone is talking about and spreading the news of how bad or good things are, that will be the general consensus.  So, if everyone is talking about how slow real estate is, people will not take action to buy because the consensus is that prices will remain low. If someone has lost their job, they will not be able to qualify to purchase a house. However, if someone is financially well-off, he or she may also put off purchasing a house because the general consensus is that prices are not rising. With this perception of the state of things, people who have a job may also hold off from buying because of fear they may lose their job in the future. The paradigm of the general population as a whole will affect the price of real estate and the market more so than the actual state of the economy. The lowest part of an economic cycle occurs when the consensus among everyone is not to take action. This is due to uncertainty- a "wait and see what happens" educated consumers' approach. If unemployment is ten percent, then there is ninety percent employment. Which follows that if those ninety percent did not follow the general perception of the economy, and did not care about reports of the economy, they would take action to buy now, not fearing for their future job circumstances. Why doesn't the other ninety percent who are employed go take action to buy and thus bring demand back? Because the media has released negative reports on  the state of the economy (consumers need to know what is happening) which casts a spell on those who do have the ability to buy and increase demand. The only way the housing market will change and cause the market to move forward is when the population perception changes to a positive outlook.  This can only occur when the news again spreads out among the population that times are good, and at this point the market will advance to a high cycle of prosperous times. Send your comments to: info@betterlifestyles.com     Website: http://www.betterlifestyles.com