Almost every real estate conversation revolves around the continuous rise in house values over the last four years. Some have even mentioned a concern about another possible bubble forming. However, the recent increase in prices can be attributed to a very simple principle: supply and demand.
DEMAND
Demand for single-family housing has continued to increase as the economy slowly moves forward. Recent surveys have shown that over 80% of each generation still believes that homeownership is a part of the American Dream. And a recent Gallup survey showed that Americans believe that real estate is the best long-term investment.
SUPPLY
Over the last several years, many homeowners were unable to put their homes on the market for an assortment of reasons (family finances, no or limited equity in the home). There has been a pent-up supply of sellers who have wanted to move but couldn’t. Below is a graph depicting the number of years families have historically stayed in a home. We can see there is pent-up seller demand.
As the economy improves and more families reach the point of significant equity (20%), we will see these homes come to market. As supply then matches demand, the acceleration of home price increases will begin to slow.
Bottom Line
If you are one of the families that have been chained to your current home over the last 5-7 years, now may be the time to break free and find the home of your dreams.
Source: http://www.simplifyingthemarket.com/en/feed/?a=217019-f2452a8f8cdc42dd481fd452124719d3
Linda DeVlieg Killman
Let me, an Albuquerque real estate broker, help you find your dream home or sell your current home - with a personalized marketing program set up for your needs and expectations. I want to be your first source for real estate information and I am the number one Internet real estate expert in Albuquerque. Specializing in all Albuquerque neighborhoods and the beautiful area of Chama Valley in Northern New Mexico. Contact me today to get started!
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