Is The Real Estate Market Increasing Again?
Since 2006, the real estate market has seen severe depression and has had its ups and downs, but in 2014, we’ve seen the real estate market increasing again. The previous decade saw a huge spike in real estate pricing, and that culminated in the eventual real estate bubble burst in 2006 and a financial crisis as well. Then the crash came, and real estate prices fell precipitously.
The Case-Shiller Housing Index, which tracks real estate pricing nationwide, lost a whopping 33% from its peak in 2006 to its low point in 2012. But almost as quickly, real estate investors flocked back as they realized that it could mean great profits if they get in at the bottom. Since housing recovery began two years ago, the Case-Shiller index has shown the real estate market increasing again, getting over 10% pricier year-over-year.
The rapid appreciation in pricing has caused a shrink in the inventory of homes on real estate market. This is because prospective sellers aren’t so eager to jump into what seems like a buyers’ market. This dynamic is very frustrating, especially for people who are first-time homebuyers as they face a double threat from both banks, not wanting to lend to anybody except the most creditworthy people and from homeowners, not wanting to sell while real estate prices look like they’re on the way up. With the real estate market increasing again, this might be changing for the better.
New data shows a decrease in the rapidly rising home prices that were seen in 2013. Historically, the appreciation of home prices occurs only slightly faster than that of inflation, and there’s plenty of reason to believe the real estate market will settle back into this more comfortable pattern once again. Furthermore, data released from Clear Capital, a real estate valuation firm, is actually more updated than the Case-Shiller figures and shows that real estate prices which were non-seasonally adjusted, tended to remain flat nationwide during the winter season of 2014 and that the prices fell in certain regions of U.S. such as the Midwest.
Even though the Clear Capital data isn’t seasonally adjusted, and most likely the poor winter weather depressed real estate activity in certain areas of the country, the data still shows the real estate market increasing again and the rapid price increases that we saw during 2013 will not be as much of a factor going forward.
The data from Clear Capital also shows that one of the principal stories of this real estate recovery — cash-rich investors who buy single-family homes for very low prices — could be soon coming to an end. According to the report from Clear Capital, home sales in the low price tier (those that sell for $95,000 or less) have added fuel to the real estate recovery for the past two years. This affordable sector attracted a large enough number of buyers to drive the prices up some 31.8% from the prices seen when the market hit bottom in 2011. During the last quarter, these low tier price gains slowed down to just 1.2% which is a marked difference from the 3.7% gains a year ago. This stabilization, a good indication of the real estate market increasing again, couple with the excellent rates of growth that have not been seen since November 2011, could definitely motivate many first time and “move-up” home buyers to get into the real estate market and make their move. Call Ed today for to schedule your showings at 732-997-8620.