Tuesday, June 17, 2014

Rising Home Prices Improve Equity but Future Changes are Expected to Slow


Home values have appreciated dramatically in the last two years with several of the hardest hit markets seeing asking prices up more than 20%. These include areas in California, Georgia, and Nevada. So, what does this mean for buyers and sellers?

The Ever-Changing Housing Market

The last few years have seen some dramatic changes in the housing market. First, the loss of value during the housing crisis and then finally a shift in home prices as the recovery process began. While this has been good news for some buyers and sellers waiting to get involved in the market, the unsteadiness of the housing industry has caused some concern. Now that things are finally settling down to "normal," it bodes well for the real estate market in general.   

Buyers were happy to see a bargain when prices and interest rates were low, but sellers were taking a loss on their homes. As prices increased, it allowed many homeowners to get away from negative equity and be able to sell their homes for at least what was owed on them. In fact, 3.5 million properties rose out of negative equity in 2013. That rate is expected to slow as housing prices and the increase in value slows to what is considered more average.

What to Expect

With the housing market finally beginning to settle down, there is less danger of a new bubble being created and unrealistic expectations occurring in the market. It also means that fewer homeowners will get from under negative equity in the next few months. However, it also means that price gains look more sustainable and the market is finally getting more balanced. While buyers may not get the same great deals that they would have two or three years ago, the market is still good for those looking for their new home.

If you have decided that now is a good time to buy and you want to start on your home search, contact me to show you available homes.  

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