For those of you that have been paying attention, this should not come as any surprise. Values have been on the rise in the last 6 to 9 months for many reasons, but the sharp increase off the bottom has many worried that this is also a bubble that is going to pop just like it did back in 2006/2007. For those of you who want to be frightened by the current market and its similarity to 2005, check out this article from DSNews http://www.dsnews.com/articles/commentary-dj-vu-all-over-again-2013-08-23.
My own feeling is that this jump off the bottom was inevitable. So many people had been waiting and waiting to buy that once it appeared we had it the bottom, there was bound to be an increase. I do expect that the big increases will slow down over the the next quarter as we move into the Fall and Winter seasons which are typically slower because people are paying attention to getting back into their lives after summer and then the business of the Holiday Season. But in addition to that, we are starting to see inventory levels rise and that will also begin to slow things down. As more and more property becomes available to sell, the competition to buy those properties is beginning to wade. I have taken more calls in the last 2 months from people that tell me "I think its finally time for me to sell." that I have at any time in the last 7 years.
Most of the time, when you have a bubble that is ready to pop, it is because it has become bigger than it should be. Outside influences that aren't normal and pressuring it to go higher and higher. In this market, I think the values have risen for good reasons, normal reasons. Buyers looking for opportunities to own a home, move up or finally buy that rental property. Investors looking to buy low and sell high. The only unnatural element is the subsidized interest rates. As we see those rise, and the first step has already begun, it will also put pressure on values increases to slow down or stop. But, it appears that we are now in a market that is still favorable to Sellers who now have values back at levels that many thought they would never see again, and for Buyers who can still take advantage of lower borrowing costs and values that are still increasing.
If you need any help or would like a confidential review of your situation, I would look forward to hearing from you. Have a great day!
