There have been talks about the markets and how they are reaching new highs. Other experts have said, “We are due for a recession.” Real estate prices in California are at record highs, and seem to keep climbing. So why would this be a good time to buy?
According to a survey forecast of Real Estate Professionals across the country, we will continue to see prices increase more widely in the next year. California is expected to increase in property value between 3-4% next year. How is this so with market peaks already?
The problem comes down to a supply and demand issue. If the supply is low, and the demand is high we will see a sellers market, which will mean that buyers are paying more for houses. Based on 2016 numbers, we saw that a little less than 31% of homes sold at or above the listing price, while in 2017 we have seen that almost 40% of homes sold at or above the listing price. So why not build more homes?
New construction has been spurred on, and if you look in the Kern County, specifically Bakersfield market, it seems as though there is new construction everywhere. These houses are selling out quickly, and the builders are able to get premiums for these houses in many cases as well.
The problem is that there are not enough affordable houses being given in areas that are severely over priced with a mass amount of jobs, and in areas that are affordable, there are not enough high paying jobs to keep an influx of people coming in. On top of this, there is a very lengthy process attached with building in California, and in order to counteract this we are seeing some loosening on regulations for mother-in-law units and additional unit construction on properties in some of the higher value areas.
All of this seems to point to home prices rising, which means that if they continue to rise and buyers wait to purchase then they will be paying more for their homes. This is the reason why you should buy now.
Get into a home that will earn some appreciation over the next year, and try to get a home that yourself and your family will be happy with for the next 10 years so you can weather out any market corrections that happen in the meantime.