How this information can possible affect you is essentially determined by what role you play in the real estate market.
While it could be said that buyers missed the mark by not purchasing their houses before real estate values increased, this is not necessarily the case. For one thing, buyers are purchasing real estate with a more authentic value. Consider the buyers who purchased when the market began to crash, pre-2008. They congratulated themselves on purchasing a house that was more affordable than their neighbors. But then the market continued to decline...and then it crashed. Those once happy buyers were now upside down in their mortgages. By purchasing a home when real estate values are in the midst of an upward trend, you will get to watch your equity increase, benefit from the still-low interest rates, and the chances of your new real estate retaining its value is much higher.
For some sellers, the news about increasing real estate values might not seem as rosy since they may still be in a position to lose money on their home. However, for every dollar their house increases in value, that buyers are willing to pay, is one less dollar owed on their mortgage. As more buyers hit the market, wanting to get in before housing prices peak, sellers will have a little more bargaining power. Plus, with the influx of investors making use of low interest rates, sellers with attractive homes in marketable communities are getting to unload their property within a week or two. Not too shabby.
Renters are in a good position for two reasons:
- The housing slump and record-high foreclosure rates meant that rents escalated in response to flooded rental markets. Yikes! Why pay high rent when monthly mortgages are often cheaper? Many renters have used this opportunity to truly buckle down, save money, and qualify for some of the lowest interest rates in real estate history. In other words, its a great time for home renters to become home buyers.
- Now that more renters, and previous homeowners, are able to buy houses again, the demand for rentals will go down. Basic economic principles state that rental prices should come down as well. If you are a renter who is opting to stay put, keep an eye out on for comparable rental rates in your area and renegotiate with your landlord to lower your rent.
Developers were hit hard by the real estate crash, as were the thousands of construction workers who found themselves out of a job. The news that the housing slump has ended will hopefully bring developers back out into the forefront, and help to re-employ thousands of laid-off workers. It will be good for the economy, good for the real estate market, and good for the general well-being of blue-collar workers.
It's a known fact that real estate values tend to be higher in spring and summer, and then decline in fall and winter. But as long as people hold on to their jobs, consumer confidence continues to rise, and real estate values continue to increase, it's looking like next July's single family home statistics will reflect that positive real estate trends have continued.
Real World Results for the Peninsula
If the incredible interest in the Pacific Place project is any indication, here in the Peninsula things are a bit different. We've got a very unique economy out here mainly as a result of being smack dab in the middle of the producers of so many advancements in tech, it really does create a unique situation where what's trending across California or the US doesn't always apply 100% to us.