There has been a lot of talk whether or not the San Francisco Bay Area Real Estate is in a bubble. One by one I have spoken with clients, friends and colleagues about this concern. Below is a great, quick article about the market. And here is my 2 cents. Not long ago we were in the gloom of a crashed market. Back in 2009 – 2011 no one wanted to buy real estate for fear it would never recover. Boy has it! In the Bay Area we have far exceeded anyones expectation of recovery. We are booming right now. What fuels our growth is a strong job economy in the tech world, ample cash, low supply and over demand. Much of the home sales are going cash – no worry of crashing lenders here. These homes are selling with multiple offers and for cold hard cash. There is a huge influx of foreign money too. And I know there is talk that the foreign markets are wavering – but we all need a place to live and well – why not here! The most gorgeous place on the planet! (In my humble opinion as a California native). Enjoy the article below – call or email me if you have questions. And if you are thinking of buying or selling your home – The Caton Team is but a call or click away.
Info@TheCatonTeam.com / 650-568-5522
This Isn’t a Housing Bubble: Here’s Why
DAILY REAL ESTATE NEWS
Home prices are rising rapidly, but economists are deflating concerns that another “housing bubble” is brewing.
A recent report from CoreLogic shows that twice as many metro markets are considered “overvalued” – prices are inflated relative to incomes — in the second quarter of this year compared to the first three months of the year. But economists say it’s not a housing bubble because bubbles eventually burst and home prices this time around aren’t likely to fall.
“Just because you’re overvalued doesn’t mean that you’re in a bubble or there is an impending crash,” says Sam Khater, CoreLogic’s deputy chief economist. “Some markets are overvalued because of strong fundamentals.”
The National Association of REALTORS® reported that the national median sales price is now above its 2006 peak. The median existing-home price for all housing types reached $236,400 in June – 6.5 percent above year ago levels and surpassing the peak median sales price set in July 2016 at $230,400, according to NAR.
CoreLogic’s recent report shows that home prices in 14 of the largest 100 markets have now risen above its long-term fundamental values – with six of these markets in Texas alone. Housing demand is strong and supply has been near record lows, which has paved the way for price increases among the state’s strong economy.
About 10 years ago, a housing bubble was being fueled by free and easy mortgage credit – not the case today, CNBC reports. Today, strong demand and weak supply is driving the rise in prices.
“Agents continue to highlight buyers’ growing frustration with rising prices, but see current levels largely supported by tight inventory conditions,” according to a monthly survey of real estate professionals by Credit Suisse.
Source: “Frothy, Yes, But Don’t Call it a Housing Bubble,” CNBC (Sept. 15, 2015)
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