Patience is a virtue is a great attribute to have with most big-ticket purchases. The current state of housing would suggest buyers might pay dearly with delaying a home purchase. There are many unknowns that suggest buyer procrastination could be costly with each passing day.
Home Value Increase: It’s hard to believe with our economy still in a rut that home values nationwide would increase, but that’s exactly what has happened. Housing is local and this explains why a few communities saw a slight drop in property values but many more sold properties than last year. Davis, California falls into that category with a four percent decrease in value and approximately a ten percent increase in homes sold. The biggest factor for every neighborhood has been the lack of properties to pick and choose from for home buyers. When you have three or more buyers for every correctly priced home on the market, this will naturally increase the value of that particular property. As our overall economy continues to heal, housing values should continue the upward swing.
Unpredictable Mortgage Rates: Just as the lack of inventory was a factor in the jump in property prices, the historical low mortgage rates kept buyers motivated and have been the main reason that demand has been so strong for the low supply of properties. Rates had dropped to new lows for twelve of thirteen weeks until a weekly increase in August. Mortgage rates had to start trending up after so many weeks of record-setting drops. The rate jump is bad news on two fronts for prospective buyers. What a buyer can qualify for decreases and the monthly payment increases with the slightest interest rate hike.
Likely Sellers Market: Real estate is cyclical and can accelerate from one cycle to another very quickly. Most signs are pointing toward a seller’s market. Buyers should not fear this shift, but should try to take advantage of the opportunities before we move into a full-fledge sellers market. It’s unlikely property values will surge as they did on a yearly basis back in the early 2000’s, the more realistic expectations would suggest a two to three percent yearly increase. The danger in delaying your home purchase can have long-term negative affects for consumers. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities