The real estate market is affected by many factors. There are lots of moving parts that can change very quickly. Here is an example of a few of them, and how they tie in to the big picture.
Supply and demand. The supply of homes for sale and demand from buyers can have a huge impact on the local market. What we are experiencing here in the San Ramon Valley, low inventory of homes for sale, and very high demand, is driving home values up, which has the happy byproduct of increasing homeowners equity.
Equity As home prices rise, homeowners who were struggling to stay afloat—without enough equity to pay off the mortgage—may start coming out of hibernation and start selling and buying homes. Due to this slow but steady increase in prices, many homeowners emerged from a negative equity status during late 2011 and mid 2012. Things that increase the value of a house also increases equity. Therefore, home improvements can be a practical and profitable investment. Homeowners who invest in routine maintenance, along with other projects like renovations and additions, are increasing equity while also making the home a more enjoyable place to live. Landscaping, new fixtures and adding energy-efficient appliances all boost home values and raise the owner’s equity. Find your San Ramon homes Value.
The Job Market. When companies are hiring or expanding in an area, the increasing workforce needs housing. The rental market is saturated, causing rents to increase, which helps encourage renters to consider home ownership. We are seeing this happen here locally. Bishop Ranch Business Park has had an increased demand for office space from tenants such as GE and PG&E and Bechtel.
Consumer Confidence In many metro areas with potential demand for housing, investors buy up these undervalued homes, which are often vacant and in bad shape. They repair and remodel them, and by renting or selling them, attract occupants. The neighborhood bounces back, and prices begin to rise. It takes about a year of steadily rising prices to encourage consumers that things are improving and it may be safe to jump back in the water.
Interest rates. The lower the interest rates are, the more possible and appealing it can be for prospective homebuyers to enter the market Loan underwriting practices remain stricter due to the 2007-2008 loan debacle. Continued recovery of the housing market also depends on how Congress handles the current expiring tax credit issues. Most economists feel that the majority of this uncertainty will be settled by the second half of 2013. Hopefully this can give the housing market the momentum it needs to stay on the path of recovery.
Banks and Lenders The number of foreclosures nationwide to continues to decline in 2013, partly because lenders have figured out that they lose less money on short sales (homes sold with lenders’ approval for less than the owners owe on their mortgages) than on foreclosures.
The Real Estate Market responds to these and other factors in a countless variety of ways. And it can change very quickly. We as your local Realtors, keep our fingers on the pulse of national and local news, and how it can affect what we do and how we do it. If you are thinking of selling or buying, feel welcome to call, email or text us today. We are happy to discuss your situation and all the factors and moving parts involved.