Home prices rose substantially since September of 2016, which is impacting real estate agents and those searching for homes significantly. "As a result, 48 percent of America's top 50 housing markets are overvalued, up from 46 percent in August." This means that the average listed home prices are valued at least 10 percent higher than what they will be in the "long term, sustainable value." This is significant because the housing market is one of the backbones of the U.S GDP.
These increased prices are causing a large reduction in demand for new houses.This is also decreasing the supply of homes on the market as homeowners fear they will not be able to find a new home after the sale of their current property. These supply and demand changes are due to changes in expectations of those in the housing market. Both sellers and buyers are expecting a decrease in prices and are waiting until they are lower to sell and/or buy. Once rates settle closer to the long term sustainable value, we should see increased consumption and more action in the housing market. This will help bolster U.S GDP, as housing is so important to the health of our economy.
https://www.cnbc.com/2017/11/07/more-housing-markets-are-overvalued-and-consumers-feel-the-pain.html
The problem is the house prices getting constantly higher when it is supposed to be lower, so it is affordable for the buyers and hence, be sold. I hope the US government intervenes and regulate the price to boost the economy.
ReplyDeleteRecently the housing market has boomed, anybody who puts their house up normally sells it in days. So I don't think the prices rising is very surprising. Mainly because, houses are selling left and right, so a homeowner can put their house up for a little more, and itll still sell. Inevitably, the housing market will go up and down, thats no secret. So if it is reaching an all-time high, no one will be surprised when it comes back down. Looking forward to business cycles.
ReplyDeleteI agree with Antonio. The past couple months I have been looking for a house to buy and all of the houses/condos/apartments I have been looking at have sold in a short time. In addition, a lot of the houses have been selling for more than you would expect. I think the housing market changes a lot based on expectations, so it will be interesting to see how long it takes until the prices come back down.
ReplyDeleteI was reading an article on the housing market a few days ago that stated renting homes is overtaking the housing market. Millennials are aren't in a hurry to lay down roots. Whether they are prone to traveling or they simply aren't ready to commit to one home for a long term. I personally would prefer to rent over buying. This will be interesting to see if it has an effect on the buying and selling of homes.
ReplyDeleteThe fact that houses are becoming more an more expensive is a problem for millennials because many millennials are not willing to commit to buying houses.
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