Real Estate Advice: Sell Now!
NAR Chief Economist Lawrence Yun is supporting what I have been telling consumers for the past few months:(1) Home sales will grow modestly this year, but a continuing inventory shortage will keep upward pressure on prices and make it hard for many people to buy, even though interest rates remain low.
(2) Inventory shortages continue to be a main driver of price increases, which were almost 7 percent nationally last year. The increase far outpaced wage gains, which were up only about 2 percent. Yun is forecasting prices to rise another 4.5 percent this year.
(3) Continuing low interest rates are a bright spot, but Yun warned that when inflation picks up, mortgage rates will follow suit. Yun said today’s low consumer price index (CPI), at about 1.7 percent, doesn’t reflect the rise in prices people are seeing on everyday items because low gas prices are keeping the broader index down.
Summary/Projections:
* Today: Low Inventory + High Demand = Increasing Values (Seller's Market)
* Increasing Values > Wages = Real Estate Becomes Unaffordable
* Unaffordable Housing + Higher Projected Mortgage Rates = Projected Less Demand
* Projected Supply > Projected Demand = Projected Decreasing Values (Balanced Market - Real Estate Becomes More Affordable)
* The pendulum will continue to swing from Seller's Market to Buyer's Market back to Seller's Market as we continue to recover from the Great Recession
On the fence about selling? Advice: Sell now.
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posted by David Ray @ 1:44 PM
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