Real Estate Market Condition
With just over five months left for the 2015 real estate market, the market remains strong and barring any major interest rate hikes should remain so through the end of the year.
According to the most recent S&P/Case-Shiller Home Price Index, home prices continued to increase in May, though not at the pace many experts had predicted. On a national basis, single-family home prices seem to have settled in at an annual appreciation averaging between four and 5%.
The chairman of the S&P Dow Jones indexes said that he expected the future average home prices to slow down rather than accelerate. Meanwhile, the average single-family home resale price appreciation has been about double that of inflation and wage price increases for the year.
On the other end of the real estate market forecasting, some are saying that we are well into a second real estate bubble. Here in San Diego and Southern California in general, home prices have increased well beyond economic fundamentals. Not only is this true for home appreciation, but also for rentals in Southern California. The huge increase in rental rates is the main reason we are seeing more roommate rental arrangements.
Also, here in Southern California and San Diego in particular, homeowners are being saddled with higher electric rates, higher water/gasoline cost and a distinct possibility of new State tax increases. Now, couple these increases with the just announced Obama Care health insurance increases and the fact that before the end of the year it is almost a certainty that the Federal Reserve will raise interest rates and we have a huge hit to Californians disposable income and their ability to qualify for a home mortgage.
Here is some good information on our last real estate bubble – from Wikipedia, the free encyclopedia
