More Pain Predicted for Home Buyers Waiting for Price Drops
The current Arizona real estate market shows a well-known economic theory in action. Home prices have been increasing for a few years now. And the law of supply and demand is partly to thank for that.
Generally speaking, when demand is high, prices will become more expensive. When the costs are decreased there will be more available of the item.
When demand is high and supply is meager, prices can also rise.
Today's housing market is complicated. Understanding the housing market and the impact both supply and demand have can provide the answers to a few questions. What are some thoughts on this?
Why are home prices rising?
- Where are real estate prices headed?
- What does this mean for current homebuyers?
- Why Are Arizona Home Prices Rising?
CoreLogic's latest Home Price Insights report suggests that home prices have risen 18.1% since last year. Looking at the considerable spike in demand for homes as people seek bigger houses with more living space and amenities. Low mortgage rates and low inventory of homes across the country are driving up prices for consumers, who are also growing increasingly confident in the economy.
The recent findings provided much-needed insight into the reality of the current state of the real estate market. This is valuable information for prospective investors and can help provide useful insights for future decision-making.
The demand for buyers to purchase homes is constantly exceeding the supply of homes for sale. This causes home buyers to compete harder and lower their expectations of lower prices, increasing buyer traffic. The demand for Arizona homes is significantly greater than the current supply.
The demand for homes in the United States is significantly greater than the current supply. This has led to higher home prices and fewer affordable homes.
The combination of a low supply and high demand is what's driving home prices up. Keep track of the changes in the housing market to ensure your investment doesn't take a hit. Bill McBride from Calculated Risk puts it best when he said:
"By some measures, house prices seem high, but the recent price increases make sense from a supply and demand perspective."
Are the Arizona Home Prices Headed Up?
The supply of homes for sale will significantly affect where Arizona prices are heading over the coming next months. Many real estate experts forecast prices will continue to increase, but they'll probably appreciate at a slower rate.
Arizona buyers who wish to purchase a home that reflects their values will find this to be welcomed news.
The most misunderstood aspect of this statement is precisely how inflation can cause price increases. Price increases may happen slowly, but experts still expect them to continue to rise further.
The forecasters that predict home prices show us on the graph below prices will continue to rise soon. The particular chart you are referring to most likely does not forecast how specific markets will evolve, but it does show the opinion of real estate prices.
What Does This Mean for Arizona Homebuyers?
If you're waiting to enter the Arizona market because you're expecting prices to drop, you might pay more in the long run.
Even if prices aren't increasing as fast next year, home prices are still projected to increase. This means it will be difficult for many people to afford a house like yours in 2022.
Bottom Line
Some experts think that home prices will increase slowly over the next few months, but you should still prepare for an overall rise in prices. As long as demand manages to keep up with supply, this may be your last chance to find a popular neighborhood before prices continue to go up. Let's connect today to talk about what that could mean for you if you wait even longer to buy.
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