Almost every real estate conversation revolves around the continuous rise in Irvine house values over the last four to five years.
Some have even mentioned a concern about another possible bubble forming. However, the recent increase in prices can be attributed to a very simple principle: supply and demand.
Demand for single-family housing has continued to increase as the economy slowly moves forward. Recent surveys have shown that over 80% of each generation still believes that homeownership is a part of the American Dream. And a recent Gallup survey showed that Americans believe that real estate is the best long-term investment.
Over the last several years, many homeowners were unable to put their homes on the market for an assortment of reasons (family finances, no or limited equity in the home). There has been a pent-up supply of sellers who have wanted to move but couldn't. Also, Irvine is constantly exanding and new developments mean a new supply of brand new homes!
Typically after the Super Bowl, we see more homes being listed for sale. Well, Super Bowl was yesterday, so I'm expecting the usual surge, although not close to record numbers.
As the economy improves and more families reach the point of significant equity (20%), we will see these homes come to market. As supply then matches demand, the acceleration of home price increases will begin to slow.
If you are one of the families that have been chained to your current home over the last 5-7 years, now may be the time to break free and find the home of your dreams.