Renae Stucki Realtor wanted to take this time to talk about some concerns I’ve been hearing around the area. With the price of rent increasing every year and housing prices on the rise, many buyers and sellers are starting to worry we’re moving into a new housing bubble.
These fears are somewhat unjustified and my reason for saying this is two fold.
First and foremost… Although there have been price increases in new home construction, that hasn’t translated as drastically to homes on the market for resale. It’s true home values are increasing, but this is more reactionary to the economy improving. This is to be expected considering how much value most of these properties lost during the recession. They’re regaining their value.
And new construction costs are rising due to a number of reasons. One is because they fell so much during the recession as companies who supply materials and provide labor competed heavily for fewer jobs. Many businesses worked for no profit just to stay afloat. These increases are another way the industry is regaining much of the value it lost.
However, it’s true that new construction costs are increasing faster than home are regaining their value. So putting a home on the market or buying a resale property are still fairly strong options.
My second reason for doubting the bubble is on the financing side of home sales. With banks and lending institutions using stricter rules and guidelines to qualify borrowers, there are fewer mortgages being written and that limits the consumer base dramatically. This curbs demand. Without the full potential client base actively seeking property, demand for housing decreases and the bubble can’t effectively form.
That doesn’t mean it’s not going to happen. But it’s not likely to happen soon. Be aware, as lending gets more difficult next year when the FED eases off its stimulus, interest rates will increase and getting a mortgage will be even more difficult. This is the time to get out there and make a move. Call Renae today and let us help you get qualified and into your dream home!
