Saturday, August 11, 2012

Is This A Temporary Bubble?

I asked my fish-guy husband today for a blog post topic. I read the news, everyone knows the market is going up. So, I thought, "I'll ask a normal person what they want to read about" And, my normal person said, 'How's the market, is this a smart time to buy?" I almost peed myself laughing out loud. Don't all people ask Realtors that?

He did probe a bit more with..."Is this appreciation we are seeing going to last?"

So, again without my crystal ball, what do I think about this little bubble we are seeing? Hmmm.....

Well, if the inventory stays low, the appreciation is definitely going to last. Most definitely, the infamous supply and demand theory, we all know that. If interest rates stay low, yes, people can still buy. Tough for some to qualify, but enough can still buy to eat up the inventory.

Once we start getting more homes on the market, the demand will ease up. Right now we are seeing multiple offers on most median priced homes. More standard sellers coming on the market too and some are getting premium prices.

Right now, we are about 1/3 of our Santa Clarita Valley healthy market number of active homes in the MLS. I think we can handle twice what we have and still see significant appreciation, most definitely. I believe once we get to the 1200-1400 range, we will be setting down and go back to the 2-3% appreciation that is more of what we consider normal.

Do I think we may see a bubble burst again? Me? No, not really. I think we may see a staleness, a flat line, but not a near death again. I think we will be floating along nice and easy. Maybe not perfect, but a little less of the near death experience for certain.

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