Housing Boom Far From Over
Reasons that the Existing Real Estate Boom Is Far From Over
There has been an increase in home purchases over the past couple of years. Houses have been selling like hot cakes, in a manner of speaking… Indicating that this real estate boom is far from over. There are a couple of factors that have been pointed out which offer some insight into the existing market and why sales are likely to increase and stay stable into the future.
New Home Construction
There are several reasons that the real estate market decreases. One such factor results from an over-expansion of houses are available. However, the contractor businesses have been fairly lucrative, but still lag behind resale sales. Lower inventory in today’s sellers market is now giving an advantage to these companies due to need for adequate homes to fulfill the existing demand. As long as the supply does not ingest the need, the real estate market will certainly proceed to thrive.
Interest Rates Remain Low
While interest rates have boosted sales with such favorable terms. The appealing prices of homes has maintained the real estate market for awhile, but prices are going up and some buyers are feeling the squeeze. However, most buyers realize how much they are saving over renting in today’s market.
Length of the ARM Fixed Rate Portion Is Increasing
For those that have Adjustable Rate Mortgages (ARMs) are seeing increased flexible terms. Just recently the principal facet of the ARM has increased the length of repayment. This too, has increased buyer purchases with favorable payoff options to help new home buyers afford more.
Some people have been worried that investors who flip homes, increasing prices in a market and this increase in values may be an indicator of a potential bubble. Anyone who shares this concern can relax very easily when they realize the percentage increase with respect to numbers from 1998 to 2003 is only 1%. When looking at the total of a 1% rise within 5 years, you can see this is not something that should be a huge concern.
The Prescott real estate market has been doing fairly well in the past couple of years. Whether this market continues to boom for a long time in the future is still something we should keep an eye on with potential rate hikes. However, for now, the market appears to be stable with mortgage rates going down and supply going up we should continue to see favorable numbers.