Prices of everything are driven by supply and demand. That now that works in the housing market if you are a homeowner who wants to sell. That is because in many parts of the country housing supply lags demand.
In 1970, almost half a century ago, housing costs in metropolitan areas like New York and San Francisco we closely tied to the cost of construction. Fundamental production costs which include the cost of building, the value of the land and profit for the builder governed the value of homes. Perhaps in the biggest cities prices were 20% more but that was rare and limited to places like New York City and San Francisco. Today that is not the case. Prices are higher in many areas because the number of available dwelling is swamped by the number of folks who want to live there.
Normally, when there is demand for housing in a given area, builders will purchase land, build dwellings and put them up for sale. But, in congested urban areas, there is no more room and demand routinely exceeds supply. The situation of demand exceeding supply also exists in other parts of the country and for the home-owner creates a condition where it might be wise to sell their home and take advantage of the local market boom.
But, Won’t Prices Just Keep Going Up?
That was the thinking during much of the first decade of this century when people piled into the housing market. Then the bubble burst and prices fell hard. Over the long term property values in areas of high employment will remain strong. But there is no guarantee from one year to the next that prices will go up or down. If you are thinking of selling your home your best friend is your real estate agent or broker. It is fine to watch the evening news and hear what the talking heads have to say about real estate or anything else but it your realtor who helps clients buy and sell in your community and he or she will be your best guide about whether or not it is the best time to buy or sell. Your realtor can also tell you what you need to do to make your home more attractive and thus likely to sell faster and at a higher price. In this case, the more experience your realtor has the better. A real estate agent is licenses to give real estate advice. A REALTOR™ also belongs to the National Association of Realtors and a real estate broker has the most experience and is licenses to run a real estate business and employ real estate agents. If you really want insight into when might be the best time to sell your home talk to the broker who runs the real estate business and has been in real estate for years and years.