This question came up the other day and Renae Stucki Realtor decided to tackle this subject in today’s blog.
As many of you who follow the news or stay current with market trends know, housing sales have stabilized, but have also slowed quite a bit compared to earlier in the year. There are a couple of reasons why this is happening and the actual effect of this slowed pace is actually a good thing.
First of all, sales were up as the foreclosure rate was declining. Mainly because the properties that were under bank regulation were dwindling and have now worked their way through the market. There are very few of these properties left. But they made up a huge number of sales during the early part of the year. So fewer homes coming on the market means fewer foreclosures are happening and that indicates a recovering economy.
Secondly, the slower pace indicates the market is stabilizing further. It’s swinging back into place and will shortly even out to a level comparable to our economic growth rate.
Then why, you ask, are prices going up? Well, one of the reasons can be found in the disappearing inventory of distressed and foreclosed properties. These properties sell at significantly lower rates than they are actually worth. These rates keep the average cost low. So when they’re gone from the market, the average home cost rises to a more realistic and actual level.
Another reason is demand. There is a demand for property right now. Especially on the low end of the market and that is where the demand is strongest. Because of this demand, properties are in competitive commodities and people will pay more to get them. This also drives costs higher.
These are great reasons to have an agent on your side when you’re looking for a deal and shopping for a home. Contact Renae Stucki Realtor today and let us help you jump over the hurdles involved in buying a home and get you on the way to home ownership.
