When, the economy, soured, we witnessed, the results/ ramifications, in the ensuing, apparent, housing bubble (of 2006). The period, leading – up, witnessed, significant increases, in the costs of real estate, and, then, some of the ramifications, when it soured, including, many foreclosures, etc, and, the impact on pricing! For, the past, few months, we have witnessed, a significant rise, in, house – prices, at a historic rate! Will this trend, continue, slow, stop, or, will there, be another, bubble? After, over 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I have seen, great, and lesser markets, and, strongly, believe, there are no guarantees, when it comes to this! With, that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 3 possibilities, when it comes to this.
1. No: Perhaps, the most – studied, economic theory/ reality, is referred to, as the Law of Supply And Demand! As long as, inventory remains low, and qualified, potential buyers, out – number, the homes, on the market, prices will continue to rise. Will they do so, at the same rate? No one knows, for sure? Will, prices, come, tumbling – down, soon? My professional opinion is, the major factor is, buyer perception, as well as seller greed! As long as there is buyer interest, and enough, buyers, who can afford to buy a house (or, believe, so), there won’t be a bubble! It seems, we will be experiencing, a period of inflation, in the not – so, distant future, and, that will, continue, supporting, rising prices, etc.
2. Yes: We have experienced, historic – low, interest rates, for few years, now! This has created, mortgage – rates, which are so attractive, and have the impact, of creating, a perception, of more, bang – for – the – buck, especially, regarding, affordable monthly payments (since, the vast majority of home – buyers, use mortgages). How long, will rates, remain low, especially, in terms of, the fears of inflationary pressures, etc? What impact, will other, economic conditions/ job uncertainties, etc, have? When will more homeowners, decide, to sell, in order to profit, from today’s prices, and will it create a significant increase in inventory, etc, and, transform, this, from a Sellers, to Buyers, etc, market?
3. A mixture/ somewhere – in – between: Perhaps, the most – likely, eventually, result, will create, a market, which is, somewhere, in – between! A more – balanced market, and, a far – slower, rate, of price increases, is, likely, to become, tomorrow’s normal!
Beware, no trend, seems to last, forever! Home buyers, should purchase wha they can afford, meets their needs, etc, and they perceive, as being, fair – and – equitable, as well as understanding, the best way, to look – at, one’s family house, is, as a long – term measure!