Effects of a hot housing market
The San Jose Mercury News (In the heart of Silicon Valley), is showing that San Jose will be the nations hottest market in 2018 based on a Zillow report. They believe we will see an increase in values of about 8.9%. San Francisco to show 3.8%.
So why are the prices going up up up? Talk to 10 economist, and you fall asleep, right? But put it this way, a homeowner in Silicon Valley must have a reason to sell. If they are moving out of state, then it is a no brainer that they will sell. But if they are not leaving the area, where do they go? If they sell and buy in this market, they have to compete with all of the other buyers... So they end up staying put, and not wanting to sell. This leads to a further reduction in available inventory, which then leads to an increased demand and prices for a smaller pool of homes.
Lets consider it from a home buyers perspective... You are pre-approved to buy a home valued at $900K, with a $3,650 monthly payment, but you decide to wait. In one year, that home would now be valued at close to $1,000,000. The loan would have to be larger, and your new payment would be $4,500 (or you cannot qualify for the new increased amount). The cost of waiting for a buyer, is being priced out of the market.
Making sense of all of this is what we do best. Let's talk about how we can help you navigate this market. Whether you are buying or selling, we're here.