Financial Factors Influencing Pricing Of Residential Houses In Nakuru Eastsub-County,Kenya

The real estate market plays a very important role in any economy. It is known to have a dramatic multiplier effect and it is a key economic indicator. The real estate market has experienced significant growth in the last decade with many countries experiencing house price fluctuations.TheKenyan real estate market has been experiencing a boom in the past ten years and the latest findings have shown that the trend will continue into the foreseeable future. The study therefore sought to investigate the financial factors influencing pricing of residential houses in Nakuru eastsub County, Kenya. More specifically the study was examining the influence ofcost of land, interest rates and mortgage risk on pricing of residential houses.Theoriesthatwereusedinthestudy includedHedonicModelofPricing,ClassicTheoryofInterestRate,theTitleTheory, SimulationTheoryandStructural-FormTheory.Thestudyemployedexplanatoryresearch design.Thetargetpopulationofthestudywas60managersofthe60realestate companiesandagentsinNakuru.Theresearcheradoptedacensuswhereallthe managersintherealestateagenciesandcompaniesweretakenasthestudy’s respondents.Datacollectionwasdonethroughuseofquestionnairesconstructedonfive pointlikertscale.Thecollecteddatawasanalyzedusingstatisticalpackageforsocial sciences(SPSS).ThequestionnairewastestedforvalidityandreliabilitywhereCronbach’s coefficientAlphawascomputedfortheinstrument.Datawasanalyzedusingdescriptive statisticswhichincludedfrequency,percentages,meanandstandarddeviationand inferentialstatisticswhichincludedregressionandcorrelationanalysisandwaspresented intablesandfigures.ANOVAwasusedtotesttheinfluenceoftheindependentvariables onthedependentvariableandthestudyhypothesisatp