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Low inventory pushing housing prices up

On Behalf of | Nov 2, 2017 | Residential Real Estate |

Many people shopping for a home in California feel the mismatch between their earnings and home prices. The increase in home prices since 2011 has outpaced a modest rise in wages. According to government data, home prices went up by over 20 percent since a peak in March 2007 before the housing market collapse. During the same period, people have only experienced gains in wages of under 10 percent.

Real estate analysts blame a lack of inventory for the upward pressure on home prices. The chief economist of a realtor trade group said that the low inventory discourages people from entering the market. According to research from Freddie Mac, starter home listings are at their lowest level in more than a decade.

A survey conducted by a credit reporting agency highlights the waning enthusiasm for home ownership. Compared to only one year ago, the number of people who indicated that they might not pursue home ownership increased by 8 percentage points. Among 18- to 34-year-old people, over one-third of them did not plan to buy a home in the next 10 years. Survey respondents expressed concerns about lack of flexibility, taking on debt, and home maintenance responsibilities as reasons for not buying a house.

Despite trends that indicate a slow down in ownership, many people still choose to buy homes. People who are interested in buying residential real estate might want to discuss the legal issues of owning property with an attorney. Information about disclosures that a seller should provide, title issues or short sales could help potential buyers navigate a transaction.