Could bay area real estate be topping out?
Many say that it’s the time of year.
Buyers are frustrated and everybody is beginning to shift their focus to the holidays.
However it’s highly possible this could be a perfect storm for real estate values to have a significant traction.
Here’s 3 reasons why the Bay Area real estate market may be topping out
ONE: National Association of realtors report that homes pending for sale all over the country of slowed significantly nationwide.
Reports from the East Bay times confirms it’s even more serious in the bay area.
TWO: The feds policy to begin reducing its balance sheet basically means it’s going to aggressively start raising rates. Rates have already been raised several times this year and it’s expected but they will be a raised aggressively starting in December.
THREE: There’s a very real possibility due to the new tax proposal in Congress that the Mortgage Interest Tax Deduction along with other Real Estate write offs could be taken away from homeowners. This could cause some significant changes to home owners in high taxed states and could affect real estate values especially in California.
If the mortgage interest tax deduction is taken away on any level it will raise the overall costs of real estate ownership and could have an overnight impact on home values especially in wealthier areas.
One BIG reason it may NOT be topping out.
At the end of the day supply and demand are the biggest key indicators of an economic market... the only indicator I see that will hold this market up is the LACK OF INVENTORY on the Bay Area market.
In lieu of other heavily weighing factors until a catalyst occurs making people WANT to sell more homes this market could hold strong.
You can check the inventory in your area by clicking here.
Here’s the bottom line
If you’ve been tossing around the idea of selling it would be a good idea to contact your agent sooner than later
If you have any need to leverage equity in your home lower your interest rate or take cash out you may miss the boat on refinancing once the Fed starts to raise rates.
If you’re a potential buyer it’s highly likely all this will be a wash if real estate prices come down and rates go up they can possibly cancel each other out depending on the severity of both corrections.
We will have to wait and see I guess.
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This week I wanted to get A little bit back to the market since there are several key indicators pointing to a cool down in the housing market that were recently released.
Let me know your thoughts or questions in the comments below.