Have you been wondering what’s going on with the real estate market? Have you asked yourself the following..
How long will this upturn last or are we headed for a recession?
It seems that the key element is the lack of inventory.
Lack of inventory meaning houses on the market for sale. The upper end homes have plenty of inventory. New home construction seems to be in the upper medium to higher price ranges. This is direct competition with the resale market which in turn keeps the prices for the resale home at bay. The new homes add to the supply of the medium and higher priced homes. You may even see price reductions for the resale market in this range. According to Lawrence Yun, Chief Economist, NAR, “some markets will actually see some price declines in upper end neighborhoods. They will see some price declines because of less favorable tax treatment or mortgage interest and property taxes.”
Lawrence Yun goes on to say, “But on the lower end, price growth will be stronger going into the next couple years.” The lower range homes sell quicker for many reasons thus the reason for the price growth. First time home buyers taking advantage of the lower interest rates and feeling confident of the economy plus the competition with the investors buying the lower range homes also cause the price increase in this lower range.
Let’s look at the pace of rising prices of homes.
According to Ralph McLauglin, Deputy Chief Economist, Corelogic, “Not only are prices rising at the slowest pace since 2012, mortgage rates are also at some of their lowest rates in a couple years.” Yes, as you may have heard we are in our longest economic upturn on record. Some say if that changes we may go into a recession but it is an economic recession not a housing recession. Again according to Lawrence Yun, chief Economist, NAR, ” the economy appears to be in decent shape.”
So, the good news?
The housing market is is strong and healthy, that’s the good news.
If you are thinking of selling your house, now IS the time. Check out this link for what’s happening in the real estate market in your neighborhood.
Looking to buy? We can help with that too! Contact us here. We will guide you through the process.