HOUSING BUBBLE ANYONE?

HOUSING BUBBLE, ARE WE HEADING FOR ANOTHER ONE OR NOT?

This question is being asked with more force and frequency recently. Of course, no one really knows the answer because none of us has a crystal ball. However we do have data and that is the next best thing.

Warren Buffet recently offered his opinion that there is no housing bubble “right now at all”. That is a pretty solid judgment from a person whose good judgment has been proven over several decades.

Could that change in the future, of course but for now an investment in buying your first house or making that move up buy is a close to a sure thing as we can get.

Warren Buffett: There is No Housing Bubble

STM-Share-1

With home prices expected to appreciate by over 5% this year, some are beginning to worry about a new housing bubble forming. Warren Buffet addressed this issue last week in an article by Fortune Magazine. He simply explained:

“I don’t see a nationwide bubble in real estate right now at all.”

Later, when questioned whether real estate and/or mortgaging could present the same challenges for the economy as they did in 2008, Buffet said:

“I don’t think we will have a repeat of that.”

What factors are driving home prices up?

It is easily explained by the theory of supply and demand. There is a lack of housing inventory for sale while demand for that inventory is very strong. According to a recent survey of agents by the National Association of Realtors (NAR), buyer traffic was seen as either “strong” or “very strong” in 44 of the 50 states (the exceptions being: Alaska, Wyoming, North Dakota, West Virginia, Connecticut and Delaware).

Also, in NAR’s latest Pending Home Sales Report, it was revealed that the index was the highest it has been in a year.

What does the future bring?

As prices rise, more families will have increased equity in their homes which will enable them to put their home on the market. As more listings come to market, price increases should slow to more normal levels.

Anand Nallathambi, President & CEO of CoreLogic, recently addressed the issue:

“Home price gains have clearly been a driving force in building positive equity for homeowners. Longer term, we anticipate a better balance of supply and demand in many markets which will help sustain healthy & affordable home values into the future.”

LIKE MORE INFORMATION, JUST CALL THE DAD AND DAUGHTER REAL ESTATE HOT LINE AT 484-574-4088 OR USE THE “PING” LINK OR CONTACT BOX ON THE SITE.

Leave a Reply

Your email address will not be published. Required fields are marked *