Prices Remain High

Low Inventory Causes Home Prices to Accelerate

My buyers keep running into this problem.

Low Inventory Causes Home Prices to Accelerate | Keeping Current Matters

brought to you by THE KCM BLOG

The National Association of Realtors (NAR) released their latest Quarterly Metro Home Price report earlier this month. The report revealed that home prices are not only continuing to rise but that the increases are accelerating. Lawrence Yun, Chief Economist at NAR, discussed the impact of low inventory on buyers in the report:

“Without a significant ramp-up in new home construction and more homeowners listing their homes for sale, buyers are likely to see little relief in the form of slowing price growth in the months ahead.”

Here are the percentage increases of home prices for the last two quarters:

Low Inventory Causes Home Prices to Accelerate | Keeping Current Matters

What this means to sellers

Rising prices are a homeowner’s best friend. As reported by CoreLogic in a recent blog post:

“With demand strong and inventory thin, the share of homes selling for the list price or more has also returned to pre-bust levels. With inventory tight, homes are more likely to sell above the asking price.”

What this means to buyers

In a market where prices are rising, buyers should take into account the cost of waiting. Obviously, they will pay more for the same house later this year. However, as Construction Dive reported, the amounts of cash necessary to buy a home will also increase.

“These factors have created a situation where the market keeps moving the goalposts in terms of the down payment necessary for first-time homebuyers to get into a home.”

Bottom Line

If you’re thinking of selling and moving down, waiting might make sense. If you are a first time buyer or a seller thinking of moving up, waiting probably doesn’t make sense.

 

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Before going into real estate in 2001, I worked in the medical field. Found it very rewarding helping others and decided to make a switch and help those, who want to achieve the "American Dream". As a homeowner, I know the importance of home ownership and nothing gives me more pleasure than to place those keys into the hands of a new homeowner. I look forward to helping you, with all your real estate needs.

Posted in bellflower ca, cerritos ca, Coldwell Banker, cypress ca, homebuyer, homebuying, homeownership, lakewood ca, lifeinlakewoodrealtor, long beach ca, los alamitos ca, norwalk ca, real estate, rossmoor ca, seal beach ca, Uncategorized

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