Ya Think!
That's the economic cause for the rising price trend for residential Real Estate. I was really surprised that many in our business thought that low inventory and an anemic economy would stall the recovery. I operate on the notion that the "buyer pool" is constant and, people have an ingrained sense regarding home ownership. So a few years ago it was obvious, to me anyhow, that this low inventory would drive up prices.
Now I think, with rising rates, buyers and sellers will have a greater impetus to act, in 2017, since the Federal Reserve has indicated it may raise rates 3 more times in 2017. So, unless some unseen global or local event takes place causing financial fears, 2017 should see increasing inventory and increases in sales and prices. And, with millennials entering into their 30's and having families, along with a new President and Administration causing renewed optimism, I see increasing inventory and more buyers. Prices will rise but at a slower rate. At least, that's what my Crystal Ball indicates.
The graphic and ensuing article I received from Keeping Matters Current.
Inadequate Inventory Driving Prices Up
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The latest Existing Home Sales Report from the National Association of Realtors (NAR) revealed a direct correlation between a lack of inventory and rising prices. We are all familiar with the concept of supply and demand. As the demand for an item increases the supply of that same item goes down, driving prices up. Year-over-year inventory levels have dropped each of the last 18 months, as inventory now stands at a 4.0-month supply, well below the 6.0-month supply needed for a 'normal' market. The median price of homes sold in November (the latest data available) was $234,900, up 6.8% from last year and marking the 57th consecutive month with year-over-year gains. NAR's Chief Economist, Lawrence Yun had this tosay: "Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017. Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country."But there is good news about rising prices. More and more homeowners are recovering from a negative equity situation and learning that they are able to sell their homes andeithermove up to their dream home or downsize to a property that will better suit their needs. Look for these homes to come to market soon. Bottom LineBuyer demand continues to outpace the supply of homes for sale. Listing your home in the winter attracts serious buyers who are looking to close the transaction quickly. |
May 2017 be your best year ever!
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