I’m sure a lot of you see oodles and oodles of Realtors posting in regards to how currently the real estate market, is a sellers market. A sellers market simply means that there are more buyers then houses. If you are waiting to buy, the prices may just get higher however, and here is why.
Simi Valley is a prime example of a current sellers market. Fairly priced, turn key homes are flying off the shelves at astronomical proportions. Especially in the 400-600 range. A very common question I receive is “how long is this going to last?” Here’s my 2 cents. I believe a sellers market may quite possibly be the new norm.
Reason 1. The investors.
With more and more investors turning to property as their investment option, expect to see houses getting held on to for longer periods of times. This is due in part to investors simply renting out their properties over and over again. Only appearing on market as a rental. Even if the market takes a dip, people will always need a place to stay.
Reason 2. Financing options
Putting 20% down on a house is no longer the new norm. Many lenders are providing conventional loan programs with as low as 3, 5, or 10% down. With buyers having more options now a days, expect to see more of them hitting the streets in search of their new home.
Reason 3. Rental realization
People have come to realize not only that they are paying more overall in renting their home, but how much more. Simply put, rentals are investments for their landlords. Why pay somebody else’s mortgage? There are many perks to owning your own home, including tax breaks.
Reason 4. Average median income vs. Average median house price.
This is the biggest one in my opinion. Currently in Simi Valley, the average median home price is considerably higher than the average median household wage income. This creates an overabundance of buyers set at a specific price point, that in turn becomes extremely competitive. In the housing market, more buyers equals higher home prices.
Reason 5. Growth
Simply, the city is growing in numbers faster then homes are being built. Thus adding to the competitive nature known as the housing market.
At the end of the day, there are still good deals to be made, and equity to be gained. Buying in a sellers market can still be beneficial for you in the long run. Little advice, make sure to sell while it’s still a sellers market, however I don’t see an end to that in the near future.
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