Is the Real Estate Market Really Poised for a Crash?
August 28, 2018
The media has been stating that the real estate market may be headed for a crash because sales have slowed. Not True! In fact, The California real estate market is as robust as ever, and purchasing a home remains one of the greatest investments you can make. Here are the facts:
A 7% drop in total Single Family Residence between June 2017 (443,000 SFRs sold) and June 2018 (411,000 SFRs sold) prompted sectors of the mass media to proclaim the beginning of a crash. In fact, it has merely been a return to average sales volume (~405,000 SFRs) from a particularly busy 2017, largely due to a lack of inventory in 2018. This is not indicative of a crash.
Average home price has increased from $552,420 in 2017 to $602,760 in 2018. Prices drop during a crash.
Average Days on Market (DOM) has stayed constant at 15 from 2017 to 2018. Average DOM increases during a crash.
Price per square foot increased from $270/sq.ft. in 2017 to $290/sq.ft. in 2018. You can guess what happens to Price/sq.ft. during a crash.
List Price to Sales Price ratio has stayed constant at 100% between 2017 and 2018. What crash?!
Now let’s take a look at the numerous benefits of buying a home in today’s market:
Stability: Home prices in California have constantly increased since 1970, making a home an ideal hedge against inflation.
Safest Loans since 2009: Tight restrictions and improved lending practice have made garnering a loan safer than ever.
Low Mortgage Rates: Loan rates are currently under 5%. A low inte
rest rate directly translates to more buying power, so your dollar stretches farther.
Low Supply/High Demand: A lack of adequate housing supply, coupled with constant demand, means your investment will appreciate and be easily transferable on the open market.
Homeowner’s Net Worth is 45X Greater than Renters: Renters build equity for their landlord; owners build it for themselves!
Step Up Buying: Can’t afford your dream home now? Starting small allows you to build equity and work towards your dreams in a stable manner.
Whether you are looking to purchase your dream home or sell your current property for top dollar, Spann & Associates has the expertise to ensure you succeed in the Santa Barbara market. Give us a call or email today to start your stress-free transition!