If Isaac Newton were buying a home today, he might wait.
“What goes up must come down,” after all.
But unlike gravity, the forces that apply downward pressure on real estate are not so predictable.
Southern California real estate is booming. Last month in Orange County, single-family homes averaged just 6 days on the market, and the price paid per square foot was up 15% from a year ago. Why?
It’s not a bubble, according to NAR chief economist Lawrence Yun. “It is simply a lack of supply.”
While the last housing craze was driven by dangerous lending that made disaster all but inevitable, the factors driving today’s market show no signs of slowing.
Buyer demand is high thanks to low mortgage rates and more time spent at home, and financial institutions are further adding to demand. On the other hand, housing supply is at historic lows. Some sellers would rather not compete for their next home, listings that do hit the market are snatched up fast, and builders are facing higher material costs.
Will any of this change substantially any time soon? No one has a crystal ball to know for certain. Prices could go down, stay flat or keep rising. But there’s no guarantee of a discount or a smoother ride for those who wait. Looking back a year from now, today’s listings might seem a relative bargain.
So, if your goals and finances align to buy or sell right now, what are you waiting for?
As always, we’re here to help you and anyone you send our way!
I hope you find something of value in this monthly newsletter I’ve crafted for you.