Are we heading for a real estate bubble? Listing Inventory remains limited and home buyers can expect that 2017 will be similar to 2016 in this regard. I anticipate that housing prices will increase, but not as much as 2016. Interest rates will also increase.
Sadly, the percentage of people who own their own home continues to decline. I fear we are on our way to becoming a nation of renters. Home buyers I feel your pain. My daughter just made an offer on a Westside condo. We offered $40,000 over asking. We received a counter asking for $35,000 more, to remove our appraisal contingency and to close in 14 days. We couldn’t meet those terms and our condo search continues.
Not prioritizing homeownership is a very serious mistake. Purchasing a home is the pathway to wealth. The average homeowner to this day is nearly 40% wealthier than a renter. Are we headed for another real estate bubble? We always are but I don’t feel it coming upon us yet.
What irks me most about real estate lending is that when prices decline, the lenders become very strict with their underwriting criteria. Most self-employed borrowers who maximize their tax deductions can’t qualify for financing – not even with 50% down payments. When prices hit bottom, there are few low down payment options.
From a practical point of view banks should be more aggressive when prices have bottomed out and more cautious as prices become inflated. The banks’ exposure is greater when prices peak. But they sell the loans to pension funds… so they really don’t care.
Are we heading towards a real estate bubble? Everything changes as we race to peak prices. Then low down payment programs will become plentiful, there will be special loan options for self-employed borrowers. Buyers with poor credit will be allowed back in the real estate game. A few years after this comes back into play the bubble will burst. Because this is what we do, time after time. While some get rich from these cycles others lose all of their equity and savings.
Time is Money
Top 10 Books to Read This Summer
Top 12 Happy Hours in LA
Top 3 Home Inspection Issues in Los Angeles County
Top Four Organizing Tips
Top Negotiating Mistake Made by Home Buyers
The Pitfalls Of Seller Financing
Top New Year’s Resolutions
Top Ten New Year’s Resolutions
Twas the Night Before Christmas Covid Style
Twas the Night Before Christmas – Realtor Style
Using the Same Realtor for Buying and Selling
Veterans Day 2015
What to Do to Get Your House Ready for Sale
Benefits of Hiring a Senior Real Estate Specialist
What Are the Requirements for a Room to Be Considered a Bedroom?
Giving Back Whether By Donation Or Volunteer
What to Disclose When Selling
What to Expect for the Real Estate Market in 2015
What’s Good in the Neighborhood: Gus & Andy’s in Montrose
What’s the Favorite Room in Your Home?
When Should Seniors Sell Their Home?
White Kitchen Appliances Comeback
Who Pays for Additional Inspections?
Why a Home Might Be Sold Off the Market
Why Is There a Housing Shortage?
Winding Down 2019 at Harb & Co.
Winding Down the 4th Quarter of the Year
You Really Wanted Us to Get a Home We Loved
You Were Pleasant to Work With and You Did Extra Work and Always Kept Us Informed Whether It Was Pros or Con
You Were Very Patient
