Real estate is back in the news with leading stories to whet a viewer’s appetite for more details, and this time it’s not falling prices, foreclosures or strategic defaults. What began as a whisper last fall turned into a raging roar with the arrival of 2013. Last night a national news story flashed a map showing a one-year increase in prices of 14% from February 2012 to February 2013 for the greater Los Angeles housing market.
Indeed, the housing market has changed. Have you and your plans? If you were waiting for the bottom, you missed it. If you were waiting for the market to improve before selling, it has. Are there still good buys? Yes, but the definition of “good buy” is very fluid these days. Prices have not yet reached the dizzying heights of 2007 but predictions are prices will continue to rise throughout the year.
In my observations of the housing market behavior, the decline can be slow and painful and occur over several years, but there is a big bounce off the bottom giving the market a momentum to reclaim lost ground with astonishing speed. Yesterday, as I toured new listings, I noted properties sporting price tags higher than my expectations, and realized, I too, must adjust the value calculator in my head to the new market conditions.
If you are a buyer in this market you will most likely need to lower your expectations of what your budget will buy. It may be time to expand your search area and your “must have” criteria. If you are a seller and your life was on hold during the housing crash, it’s time to dust off your delayed plans and move forward with selling your property.
In a perfect world, the market ascent would be slow and predictable. The only thing I can promise is I can’t predict when the current climb will stall or when the market will take another fall. There is undoubtedly enough pent-up demand to drive the market for some time. An increase in interest rates will slow an over-heated market. The addition of inventory will slow the market and reduce the frenzy of bidding wars and multiple offers.
I dream of working in a balanced market, but if I’ve learned one thing in over 20 years in the business, a balanced market comes and goes in the blink of an eye. It is never here to stay.