Is the Real Estate Bubble About to Burst?

How long can the price go up before someone can afford it? Simply put, this is a basic question that goes deep into the collective unconscious when we talk about the bubbles in the house.
Real estate is valued at an astonishing rate, up to 19% in some Florida counties, according to government officials. On the other hand, interest rates are low in the financial world and stay there. Low interest rates mean less monthly mortgage payments. This means that many can borrow more and pay for larger mortgages and more expensive homes. Combining the astronomical rise in real estate value with the ongoing trend of low interest rates, there is a hot real estate market that gets hotter and hotter as investors embark on gaining a share of the real estate pie.
It wonders how long it can take for those who know finance and markets. Most of the answers are the questions that opened this article. Prices will continue to rise until most people can no longer afford it. Visit:-
Another part of the answer lies in the fact that the housing bubble is highly localized and is located in some of the country’s largest media centers. Massachusetts, New York, Florida, California-States are experiencing unprecedented rises in home and real estate prices. According to national reports, average US home prices have risen 14.7% in the last 12 months. However, percentages can be misleading. Take a look at some more locals to get a clearer picture of reality.
If you live in Nevada, average home prices are up 31.2 percent. In California, home valuations rose 25.4%. It was 24.4 percent in Hawaii, 22.2 percent in Washington DC, and up to 21.4 percent in Florida. But most of the rest of the country has not experienced such an increase in astronomical value. For example, if you go shopping in Mississippi, home prices are rising by a more reasonable 4.9%. Even in the northeast, where Boston’s two-bedroom homes sell easily for $ 400,000, you can find three- and four-bedroom homes by driving from the city to the western half of the state. For only $ 100. Less than that.
What does that mean? This means, among other things, that the dangers of a housing crisis are as localized as the consequences of the housing bubble. This means that the expected loss is likely to be lower than the actual loss. Quoting Florida economists, “People who think it’s a big bubble are experiencing a big crash. We’re just slowing down. They don’t have to worry about falling home prices. “.

The bad news can be for those who think of real estate as a quick offer. One of the most popular investment schemes in recent years is the exchange. This is the practice of buying a home and selling it for profit within 6-12 months. If home prices rise by 20-30% a year, you can make a lot of money. A $ 10,000 deposit can make you virtually double or triple your money within a year. However, conservative estimates suggest that home prices should rise by at least 15% a year to cover the cost of closing a home sold in less than a year.
Does this mean that if real estate prices stabilize and return to a normal annual rise of 5-8%, you will lose money on your purchases? of course not! It simply means that the property has returned to its previous state-a good, solid, long-term investment. This means that speculators who want to make money faster must adjust their expectations, find another product, or hold their property longer before selling.
All options are good news for classic real estate investors or the average homebuyer looking for an affordable home for him and his family. Prices will be stable and will fall a bit, but they will not bottom out of the housing market. Typical real estate owners / investors get more valuable homes and land than they paid for. And all saws and panics can’t predict the thunderous burst of a residential bubble falling to the ground.

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