Earlier this week, the National Association of Realtors (NAR) released their latest quarterly report. The report covered three important aspects of the housing market:
- Buyer Demand
- Supply of Housing Inventory
- Single Family Residential Prices
We recently reported that investment purchases in 2014 fell 7.4% for the year, that combined with a diminished supply of distressed inventory allowing for big profits, has real estate investors looking for a new way to make more money in 2015.
So if they don’t have new properties to buy… how would they make more money? Easy… they are going to raise your rent!
The National Association of Realtors (NAR) recently released a report revealing that the growing wealth gap in this country has been impacted by the recent increases in real estate values coupled with the drop in homeownership rates. The report discloses:
“Over 90 percent of metro areas have experienced declining homeownership rates at a time when home values have risen and incomes have remained flat.”
Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University expanded on the top 5 financial benefits of homeownership his paper – The Dream Lives On: the Future of Homeownership in America.
Four recent news articles confirmed that most Americans still see real estate as a great long term investment. The Gallup organization polled the American people and discovered that they believe that real estate is a better long term investment than stocks/mutual funds, gold, savings or bonds:
Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). In a housing market where supply is very low and demand is very high, home values increase rapidly. One major challenge in such a market is that bank appraisal. If prices are jumping, it is difficult for appraisers to find adequate comparable sales (similar houses in the neighborhood that closed recently) to defend the price when doing the appraisal for the bank.