Today I am going to discuss a couple questions that my clients keep asking me: Are we in a housing bubble? Will there be a downturn in home value prices?
The economy is extremely strong in San Diego and Temecula and we are not following the same pattern of oversupply that we did in 2007. In fact, we are two years behind on new home construction and that is actually causing home prices to continue to rise.
If you think you can just wait for home prices to drop, you are in for a rude awakening. The only thing that can stop this rise in prices is interest rates. For the past seven quarters, interest rates have been going up. Every 1% increase in rates decreases your purchasing power by 10%.
What does this mean if you are a buyer or a seller? Well, first of all, while I am not a real estate agent, I see the patterns since I lived through what happened in 2007. If you are looking to buy, go ahead and buy. If interest rates and home prices both continue to increase, you are going to be priced out of the market.
If you are a seller and you are trying to time the market so you sell at the peak, I would advise that you sell now instead. It is a really good time to sell and you never know what is going to happen to property prices.
So are Temecula and San Diego in a housing bubble? No— not even close. We are not even close to a housing bubble. Especially since we still have the huge problem of a lack of inventory.
If you have any additional questions, please feel free to reach out to me. I look forward to speaking with you soon.