Why Home Prices Are Increasing
There are many unsubstantiated theories as to why home values are continuing to increase. From those who are worried that lending standards are again becoming too lenient (data shows this is untrue), to those who are concerned that prices are again approaching boom peaks because of “irrational exuberance” (this is also untrue as prices are not at peak levels when they are adjusted for inflation), there seems to be no shortage of opinion.
However, the increase in prices is easily explained by the theory of supply & demand. Whenever there is a limited supply of an item that is in high demand, prices increase.
It is that simple. In real estate, it takes a six-month supply of existing salable inventory to maintain pricing stability. In most housing markets, anything less than six months will cause home values to appreciate and anything more than seven months will cause prices to depreciate (see chart below).
According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes for sale has been below six months for the last five years (see chart below).
Bottom Line
If buyer demand continues to outpace the current supply of existing homes for sale, prices will continue to appreciate. Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should.
Why You May Want To Cash in on Your Second Home
If you purchased a larger second home during the pandemic, will you continue to use it or should you sell and cash in?
Dreaming of a Bigger Home? Why Not Buy It This Year?
If you’ll be able to work remotely long-term or your overall needs have changed, it’s a great time to sell your house and move up.
What’s Motivating People To Move Right Now?
Having room to maintain a healthy lifestyle at home – physically and mentally – may prompt you to consider a new place to live.
3D Virtual Tour ~ 18 Union Avenue, Center Moriches
18 Union Avenue, Center Moriches, NY 11934
3 bedroom colonial located on Senix Creek! Perfect for boaters!
6 Reasons to Celebrate National Homeownership Month
If you own your home, take time this June to celebrate the ways homeownership has added value to your life!
3D Virtual Tour ~ 7 Woodfern Lane, East Moriches
7 Woodfern Lane, East Moriches, NY 11940
Very well maintained, 4 bedroom, 4 bath colonial in Newport Beach!
How Misunderstandings about Affordability Could Cost You
Homeownership is the first rung on the ladder of financial success for most households, as their home is most often their largest asset.
3 Things To Prioritize When Selling Your House
Even in today’s market, sellers are not guaranteed success. There are some key things to know so you can avoid costly mistakes and win big.
Where Do Experts Say the Housing Market Is Heading?
Here’s a look at what some experts have to say about what will drive the industry and the economy forward in the months to come.
Sellers Are Ready To Enter the Housing Market
As the economy continues to improve and more people get vaccinated, more sellers may finally be in sight.