Welcome back! This week, I'll be talking all about how to improve your credit. If you…
Welcome back! This week, I’ll be talking about the current craze that is affecting real estate markets here in California, as well as nationwide. Before I do, however, I want to stress that this is not financial advice. I am NOT telling you to go and buy a house right now or to wait, I am merely telling the truth about our current market here in Long Beach. It’s my hope that this update will help YOU make an informed decision about your own finances, because here at GROW Mortgages, it’s our mission to help you take control of YOUR income. It’s not up to me.
With that said, the short version is that we are in a crazy upward spiral of housing prices, so as a homebuyer, you can either WAIT and hope for things to settle sooner rather than later, or you can BUY NOW if you think things will get worse.
Here’s the longer version: I compared some data from an industry-wide database that realtors and mortgage professionals have access to. Between April 2020 and April 2021, a lot of data points changed, such as median sale prices increasing way more than normal and way less new listings of homes for sale being created. From that, I’m gathering that MORE houses than ever are being bought for higher and higher prices, but LESS new houses than ever are going up for sale in their place. This is driving housing prices UP because there’s a massive demand that’s only continuing to grow, while the supply continues to shrink.
So what can you expect as a potential homebuyer? Well first, you NEED to be ready to pay over market value if you even want the seller to consider accepting your offer over the other competing buyers. You also NEED to be prepared to lose however much you’ve paid above that market value, because most appraised values during this time are coming in BELOW the actual sales price you and the seller agreed to, so it’s up to you to pay the difference.
Again, as a homebuyer, right now you are faced with two options: The rock and the hard place. You can either BUY NOW if you think that this kind of price frenzy is going to continue, or you can WAIT if you hope that this California housing craze will end soon. My personal guess is that this price frenzy will continue for a long time before prices finally start settling back into normal ranges, because we are currently in a period of inflation. As such, if you choose to wait, you might be waiting for a long time.
If this was helpful or if you have other questions you’d like me to answer, go ahead and let me know via a comment down below, or through contacting us here at GROW Mortgages via the phone number (562)-646-7141 or through firstname.lastname@example.org.