Yesterday's question from my client:
"I feel like that the market is over inflated right now. What are your thoughts on that? We don't want to buy during a rebound just to find out that housing prices will come down next year."
My response:
"I wish I had a definitive answer for you, but no crystal ball here. What keeps the Peninsula market consistently strong is the shortage of inventory, the lack of land for building new large scale developments, and the strong, diverse employment opportunities, ones with high-paying jobs. People want to live here and the prices reflect that.
Generally the market softens a bit this time of year--prices might not decline, but the demand wanes and buyers can negotiate some. We're not seeing that this year at all. Extremely low interest rates and pent-up demand from buyers who held off the last few years due to feelings of uncertainty have created high demand.
Short of a world-wide depression, or a cataclysmic earthquake, if one is buying to make a home for the long term, my belief is that it makes a lot of sense to buy."
Perhaps this chart from Steve Harney and KCM (Keeping Current Matters) best explains that it's the cost of an investment that's important, rather than the price.
I'm practicing what I preach: we're actively looking for investment property to purchase on the mid-Peninsula.
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