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If you are interested in purchasing a house in the near future, you may have realized that supply demand real estate market prices have significantly increased during the past few years. Many people wonder if we are approaching a bubble, but there is no way to know what will happen. At the same time, it is possible to look at some of the factors that have driven up housing prices, even when looking at the condos for sale Ponce Inlet FL-based or condos in similar locations. As you view available condos, it is important to keep a few factors in mind about current housing prices.Learn what factors affect the housing supply/demand balance and how you can use them to your advantage! Click To Tweet
1. Factors Affecting Demand for Housing ( i.e. Mortgage Rates Are Low)
One of the biggest reasons housing prices are so high is that there is a lot of demand for houses. This is because mortgage rates are so low right now. Many people who traditionally would not be able to afford a house are able to do so because of the low rates.
When mortgage rates drop, you do not pay as much interest on your mortgage, reducing your overall monthly payment. As a result, the overall price of houses will become more affordable.
Even though there is some concern that the Federal Reserve will raise interest rates soon, there is no guarantee that this will happen. Many people are willing to pay extra money because they know they can afford it.
At the same time, you need to be wise with your offers, which is why you need to work with a real estate agent.
2. An Exodus to the Suburbs
Another reason why many people are looking for houses is that there has been a massive exodus to the suburbs.
Even though supply demand real estate prices are high just about everywhere, housing prices have increased significantly more in the suburbs. That is because more people are looking for houses in these locations.
Because many people can work remotely in the current environment, they can live in the suburbs even if their job is in the city. They can work remotely, afford a larger house in the suburbs, and spend more time with their children. Because of the influx of people to the suburbs, housing prices are increasing in these locations.
3. A Lack of New Housing
Another reason why the supply demand real estate market is low is that there are not a lot of new homes being developed. New housing is a significant part of the real estate market, particularly in the South. Because there are not a lot of new houses available, there are more people interested in resale houses. This is driving up the cost of current houses, making it difficult for people to afford a home.
There are a few reasons why there are not a lot of new houses available. First, a lot of construction companies are having a difficult time getting the supplies they need to construct new homes. The coronavirus pandemic has disrupted the supply chain, and it has been slow to return to normal.
In addition, construction companies are having difficulty finding contractors to work on their houses. This is slowing the rate of new home construction, increasing the demand for resale houses.
4. Pent Up Supply Demand Real Estate Market
There is also a lot of pent-up demand for houses right now. Many people have been reluctant to move during the past couple of years because of the coronavirus pandemic. People were hesitant to go and look at other people’s houses because they were afraid of getting sick.
Now that a lot of people are getting vaccinated, there is a significant amount of pent-up demand. The people who would have moved during the past few years are now looking for houses, increasing the current supply demand real estate market. Even though this pent-up demand will eventually wane, it is difficult to predict when this will happen.
5. A Hesitance To List Houses for Sale
Finally, a lot of people who would list their houses for sale are reluctant to do so. They understand how hard it is to find a new house right now, so they do not want to put their home on the market.
They are worried that if they sell their house, they will end up in the same position as everybody else, which means they may have a difficult time finding an affordable home. This is another factor contributing to the shortage of supply on the market, and it is only making the cost of housing more difficult for people to afford.
Even though it is true that people who sell their homes will probably have to find another one, it is possible to navigate the current supply demand real estate market. People need to work with a professional who has experience in their specific area, as they will be able to figure out what is a reasonable price, what is not, and how they can be competitive.
You Need To Work With A Professional
These are just a few of the many factors that are playing a role in the current cost of housing. Even though there is a push to make housing more affordable, it will be a while before we see these results.
Therefore, It is important to be judicious as you try to find the right house for you and your family. The right property is out there, but you need to work with a professional who has experience navigating the local market.
That way, you can evaluate the benefits and drawbacks of each option, allowing you to make the right decision. Reach out to a professional who can help you navigate the current supply demand real estate in the region.
Can you think of any other factors affecting the demand for housing?
Krystle Cook – the creator of Home Jobs by MOM – put her psychology degree on a shelf and dived into a pile of diapers and dishes instead. She is a wife and mother to two rambunctious boys, sweating it out in her Texas hometown. She loves cooking, DIY home projects, and family fun activities.