Almost every real
estate conversation revolves around the continuous rise in house values over
the last four 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
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.
SUPPLY
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. Below is a graph depicting the number of years families have
historically stayed in a home. We can see there is pent-up seller demand.
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.
Bottom Line
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.
Home prices are rising. If you're interested in selling your home or know someone who is call me @ 313 999-8900. I can help.
If you like my blog posts, it would mean the world to me if you
shared it with your friends.
Patrice M Miller
Realtor/Associate Broker
ReMax Innovation
313 999-8900 Cell
I believe every family should feel confident when buying and selling a home.
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