Housing Recovery Slow Down

  

The housing recovery appears to be slowing down after booming over the past several months.  Lower home prices and interest rates along with fewer properties for sale, caused many buyers and investors to enter the market and create bidding wars which drove prices up.

 

 
Home prices are now higher than they have been in years.  Along with the increase in prices, mortgage rates have also gone up steadily.  As a result, some buyers have had to step out of the market.  In addition, some investors are now choosing to step away.  This has led to what is, most likely, a short term stall in the housing recovery.


The sudden and rapid increase in real estate demand caused many to be concerned that we might be heading for another bubble.  This fear can actually cause people to act irrationally.  We need to remember that the bubble did not burst because people wanted to buy homes and were willing to pay a little more this year than last year.  There were many other factors that contributed to the collapse of the real estate market.  Home values increasing over time is a normal and healthy scenario.  When there are extreme changes in the market, however,  it is not sustainable. The market's recent "cooling off" is good example of this.

 

As investors looking for quick or dramatic returns on their investment are withdrawing from the market, they are being replaced with buyers who want to purchase a home to live in for many years.  As this exchange of buyers takes hold, it will help to continue the stabilization of our market and cause it to return to a more normal state.

 

If you have any questions concerning your real estate needs, please call Nancy Puder directly at 805-710-2415 or email Nancy at NancyPuder.com.  She always loves to hear from you!  Nancy Puder is a real estate broker on the Central Coast of California.