Almost every real estate conversation revolves around the continuous
rise in house values over the last four years. Some have even mentioned a
concern about another possible bubble forming. However, the recent
increase in prices can be attributed to a very simple principle: supply
Demand for single-family housing has continued to increase as the economy slowly moves forward. Recent surveys
have shown that over 80% of each generation still believes that
homeownership is a part of the American Dream. And a recent Gallup
survey showed that Americans believe that real estate is the best long-term investment.
the last several years, many homeowners were unable to put their homes
on the market for an assortment of reasons (family finances, no or
limited equity in the home). There has been a pent-up supply of sellers
who have wanted to move but couldn’t. Below is a graph depicting the
number of years families have historically stayed in a home. We can see
there is pent-up seller demand.
As the economy improves and more families reach the point of significant equity (20%), we will see these homes come to market. As supply then matches demand, the acceleration of home price increases will begin to slow.
are one of the families that have been chained to your current home over
the last 5-7 years, now may be the time to break free and find the home
of your dreams.