Are Property Values Really Rising Fast?

I recently read an article which stated… “If you thought that all you wanted was skyrocketing appreciation on your home or investment property, then one real estate ratings firm is warning you to think again.” At REIAComps.com, along with its Property Valuation Support and Training, you will know the truth for yourself. Let’s continue with that ratings firm… According to a new report from the data analysis firm, recent home price gains may be “too rapid” and contributing to a “market imbalance that could eventually stall or reverse the positive trend.” The firm warns that in some markets an “artificially” constrained supply of homes for sale is keeping prices high even though buyers do not actually have the wherewithal, as a population, to sustain these purchase prices. Also they added that “strong institutional investor demand…is keeping the supply-demand balance…even more pronounced.”

The ratings agency spotlighted California as a state where the recovering market’s fast pace could present a problem. The same can be true in your home state as well. California home prices have risen 13 percent year over year despite employment crunches in many parts of the state. If employment does not soon catch up to housing, this new bubble could burst, analysts warn. In San Francisco, home prices are up 22.2 percent year over year, and are only going higher thanks to “restricted supply and heightened demand.” Lastly, the ratings firm says that more and more borrowers are likely to move to the sidelines in areas where the recovery is “too rapid” in order to wait for prices to stabilize.

Do you think that there is any such thing as a recovery that is too rapid? Using REIAComps.com will put you in a position to know if your market area is “crying wolf” or is there a potential problem in the works? Let REIAComps.com show you the lambs from the wolves.