This Week in Real Estate 6-5-2015 - Market Forecast

I got the question about the “bubble”

With all the good news over the past two years with prices up nearly 50% from the bottom and in some areas in well above the peak prices of 2006, people have been asking recently “is this sustainable?” and/or “when will the bubble burst”

Well I have two answers that might seem to be contradictory, but I believe they are accurate.

#1. This growth is not sustainable. We have had approximately 4% annual growth for the past 50 years. 10% or more growth is not sustainable. Housing will become too overpriced and markets will “correct”

#2. I do not think we will have another burst anytime soon. The market has rebounded mostly because of an over correction for the previous boom. The market fell way below the 4% trend line and now we are again within 1% of that trending forecast that has been projected from 50 years ago. Also the loans that are being written today and during the boom are much more regulated and scrutinized for the borrower’s ability to pay

So No the growth is not sustainable, but No the bubble is not likely to burst.

If you would like more trend data on some markets that might have a potential bubble, you can read this article.

http://rismedia.com/2015-06-01/peak-out-seven-markets-have-hit-their-peaks/

-Kris

Ps. Happy 70^th Birthday to my Mom!

Home Tip of the week

Summer is in full swing. I don’t expect any rain for a few months. That is a good thing. It is a great time to get work done on many areas of your home that need it to be dry.

Replace windows – Dual pane windows improve the insulation efficiency of your home tremendously. They can pay for themselves in reduced heating and cooling cost in a matter of just a few years.

Painting. The #1 way to prevent wood rot and fungus damage is to keep your home well painted and all the crack sealed tight. It is recommended that you paint every 10 years. Look at your weather wall (usually the south facing exterior wall) and make sure that is seal up good. You can often delay painting your entire home for years if you make sure that this area of the exterior is well maintained.

Roof and Gutters. It is very easy to clean your gutters when all the leaves and debris are bone dry. You can often clean your gutters in just a few minutes with a leaf blower in this situation. Also now is the time to book your roofer. Often you can get the work done in the summer at a discount since the roofing contractors are not swamped during the rainy season.

If you need help in any of these jobs, I have trusted contractors that can assist.