Real estate is cyclical and seasonal. Every year, as the school year begins and fall leaves appear, home sales invariably decline. There are not as many home buyers. This year, we are coming off of a summer that slowed in comparison to previous years. The reason for the slower pace is attributed to rising home prices, fewer investor purchases, first time home buyers, and diminishing inventory.
For the past 15 years, the average decline in sales from summer to fall has been 16.4% per the National Association of Realtors. In October, homes sales are usually steady. Then in November, home sales dip again by an average of 8%. January can see a dip in sales of 27%, then February starts the rise. By March and April, the market springs back and continues into the summer.
But real estate is also local. Although the NAR reports that sales in the South and West declined at the end of the summer, areas such as the San Francisco Bay Area and Los Angeles continued to experience multiple offers and surging sales prices, due to strong business climates and low inventory.
The economy is growing, jobs are being created and interest rates are low. Home sales are expected to rise. Now is the time to evaluate your real estate needs and plan for your future. I look forward to sharing our local stats with you.
Q: Is real estate a good investment?
A: Simply put, yes it is. Not only is your home a major investment with strong potential for increased value, but also a rental property may pay big dividends. Last year, overseas buyers spent $92 Billion on home purchases according to the NAR. That is a 35% increase over the previous year.
Nearly one half of the home purchases were for investment only with no plans to live here. 25% of the buyers are from China. They are investing in homes mainly in California, Washington, and New York. The promise of good schools and universities, the strong job market in high tech areas, and the proximity to China lures buyers.
If you are considering investing for income, now may be the time to act. Single-family homes are in demand as rentals. Give me a call.
Boomers and Millenials impact today’s real estate market. Realtor.com estimates that there are 75 million Baby Boomers and 87 million Millenials.
Forbes reports that there are between 8,000 and 10,000 Baby Boomers reaching age 65 every day in America. Baby Boomers feel motivated to sell their houses and move on. Many will stay local but downsize. Others will move to areas that focus on retirement living.
Boomers bought their homes in the 80’s and 90’s, and expanded into bigger homes. According to the U.S. Census, house sizes continued to increase until topping out at an average size of 2,541 square feet in 2007.
Millenials are adults in their mid 20’s to 30’s who want to buy a home but are trapped by tight mortgage lending requirements, rising rent, and high home prices. More than half of all Millenials take a second job to get ahead. 45% of all Millenials have moved back to their parents’ homes to save money.
92% of all Millenials want to buy a home in the future. Will they want the bigger homes that the Baby Boomers want to sell? What are your thoughts?