While experts are divided on the true cause of the currently robust real estate market, sellers simply know it is time to think seriously about acting on their intentions to sell their homes. A real estate professional can help sellers who are considering putting their houses up for sale price them to move in this quickly recovering market.
Demand Drives Cost
While prices are definitely up, having increased substantially in the past year, there is a great deal of speculation as to what is causing the rising housing costs. Some experts claim that the only thing driving the prices higher is demand; there simply are not enough houses on the market to meet current demand so sellers have their pick of prospective offers, often at or above asking price. On the other hand, some experts feel that while demand is definitely inflating housing prices, the upward trend in the market is a good omen for the future. Even if demand drops, these optimists claim, the prices of homes will not return to 2013 lows.
More Expensive Houses in Demand
One interesting trend so far in 2014 is the trend toward purchasing more expensive housing. Houses below $300,000, which once made up 60 percent of the total market, today constitute only 35 percent of sales, despite the crash in pricing. Mid- and upper-range buyers seem to have flooded the markets due to extremely low interest rates, while budget buyers are still struggling to find approval on mortgages.
Inventory declines also affect the upper level markets more than the lower-priced ones. There are simply fewer expensive houses built than cheap ones, so the competition for these luxury homes is more keen. Currently, the supply of houses is enough for around 1.4 months of buying activity for homes priced under $500,000. For those priced over $1 million, the supply is sufficient for 5.4 months.
What Will Happen In The Future?
While it is impossible to predict the future, much depends on what happens with interest rates and inventory levels. If interest rates and inventory both remain low, prices will remain high.
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