Unless you’ve been living under a rock, you’ve heard of the real estate market going bananas here in the Valley along with much of the rest of the country. A mix of Covid incentivizing people to move away from heavily crowded areas along with economic policies and personal financial situations has lead to an influx of home buyers from other states, pushing up our home prices significantly.
It looks as though the steady march of home prices upwards has finally come to an end; a recent report shows that the market is cooling off. Housing inventory has spiked, as have the number of price reductions. As this report details, this does not mean that a price drop is imminent (sorry, prospective home buyers). Instead, the average prices will stabilize throughout the rest of this year, with the precise month depending on what city you’re in.
Part of this seems like it may be a natural outcrop of the summer heat; if you’re thinking of relocating from the Bay Area or SoCal, a few 110 degree days in a row may get you thinking twice about moving to the Valley of the Sun. However, another aspect may simply be migration running out of steam; if either Covid or high taxes had been a reason to leave, you most likely would have done so already.
A housing market is only as healthy as its accessibility to the middle class, and many middle class wage earners have been priced out of this market unless they want to purchase a condo or move out to the outskirts of the valley. This will not change overnight, but millennials with dreams of home ownership in their heads can perhaps sleep a little easier, knowing that the recent rise in prices won’t continue unimpeded.
For those that are homeowners currently, it’s been a heck of a ride, but they never last forever. But with a home full of new equity, perhaps now is a good time to utilize a cash out refinance to take care of repairs that you’ve been putting off.
With new data coming out about significant increases in wages across the country, perhaps we are entering a golden era where wages actually catch up to housing prices. One can dream, at least.