California residents may have noticed that home prices keep climbing even though incomes have largely failed to keep pace. According to data from CoreLogic, 46 percent of the top 50 housing markets in the United States were overvalued at the end of July 2017. A market is overvalued when home prices are more than 10 percent higher than what is considered a long-term sustainable value. Only 16 percent of markets were undervalued while the other 38 percent were considered a fair value.
Home prices increased 6.7 percent in July compared to last year while the number of available homes fell 9 percent in July compared to last year. According to the National Association of Realtors, the latest inventory figure continues a trend that has been ongoing for the last three years. Home prices have seen their sharpest growth in places such as Denver, where technology companies have made their home.
States such as Washington and Utah have seen 3 percent growth in home prices since the beginning of 2017. This has been partially because buyers were looking in new areas after homes in Northern California became too expensive. Although customer demand is high, home sales may be stuck unless there is an increase in supply. Redfin reported a 35-percent increase in requests for home tours between July 2016 and 2017. However, the number of offers dropped by 11 percent.
Prior to a real estate closing, buyers may wish to have an attorney review the terms of their purchase contracts. This may make it easier for individuals to understand their rights and obligations after signing the contract. Attorneys may also be able to review a mortgage contract or other financing agreements to increase the odds that a buyer knows what he or she is agreeing to.