We saw rapid appreciation and fast responses by buyers in the U.S. real estate market from 2002 through 2005. This response was caused by the fact that demand for real estate was at an all-time high while the supply was limited. Causing rapid appreciation, with home sellers receiving multiple offers within days or even hours. At one time during that period, homes in southern California were selling, on average, at 18% above the listed price – the result of a market condition where demand outstripped supply.
Positive situations cause positive outcomes, and vice versa. For example, a hot economic growth leads to a hot real estate market and strong appreciation of homes, while loss of jobs and a languishing economy produce exactly the opposite effect.
As the baby boom generation matured, it fueled an explosion in second home purchases so strong that more than 21% of 2004 U.S. home sales were second home purchases – most acquired by aging baby boomers. This created desire for additional housing that affected the construction and home values in second home markets nationwide.
Periods of rapid real estate appreciation are followed by stagnant periods where values stabilize or even decrease. By acquiring marketplace knowledge, you can foresee trends. This stagnant period is about to end. The up-cycle market is around the corner. Rates are the lowest that they have ever been, and prices are at the lowest they have ever been. Buyers!!! This is the time to buy!!!!
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