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Should I Wait For The Market To Come Back Down
The Million Dollar Question:
A lot of people have been asking this question since values have been appreciating lately. It's a good question. We're in a robust market that is great for move up buyers or sellers in general. First time buyer's on the lower end of affordability have been feeling the squeeze. Those buyers also compete against all cash investors as well.
Last Time around...
To answer the question lets look at supply and demand. Everybody remembers the last housing crash and is weary of that happening again. Last time around there was a relaxing of lending standards that led to an inflated demand, and when rates adjusted, a subsequent rise in foreclosures. The sudden wave of foreclosures created a large amount of supply and pop goes the bubble.
...This Time around
This time around what is driving values up is a lack of inventory. So a low supply and high demand lead to rising prices. The Daily Bulletin cited a CoreLogic report that stated that single family home values rose 5.8 percent from May 2016 to May 2017. LA County saw a 6.4% increase during that same time, and get this: Rancho Cucamonga zip code of 91737 saw a 15.8% increase with the average single family home increasing to $611k.
The Hard Numbers
CoreLogic President and CEO Frank Martell predicts that California will see a year-over-year price increase of 9.7 percent in May 2018. Mainly due to developers stating they can't build enough houses. We've seen developers build luxury apartments to create higher density housing. Home owners have also been re-financing and spending equity on non-real estate as well.
The Bottom Line
Bottom line is if you're waiting for prices to go down, it may be while. There would need to be a massive increase in supply, and there doesn't seem to be enough building happening as of yet for that. In my experience getting your foot in the door with real estate will help you to keep pace with and experience the benefits of rising real estate values in California.
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Raul Acuña - Raul has been in the Real Estate Industry since 2005. Raul began working at an REO brokerage before opening his own REO company in 2010. Raul has a business degree from Cal Poly Pomona, ....