I see definite signs that the housing market is heating up. Whether you have voted for our current administration or not, the O’Bama administration is pulling the market out of a plateau. With all the money they are pouring into the real estate industry to slow down foreclosures, short sales, and lower mortgage interest rates plus the $ 8,000 tax credit for first-time buyers, the market is starting to shake and burn.

Now let’s face the facts. The new construction of the market began to slow down more than 3 years ago. Inventory is shrinking as homes continue to shrink. Additionally, many properties disappear each year due to aging, rezoning, and natural disasters. If we continue to add another 3 million citizens each year, then we are really going to have a real estate shortage in the next 2-3 years.

The tried and true rule of basic economics is that supply = demand. As demand continues to increase, a shortage of supplies is created. Therefore, prices start to rise. The stimulus bill will likely put extraordinary pressure on our economic system, creating extreme INFLATIONAL pressure. You just can’t spend and spend without having to reimburse. The payback comes in the form of inflation … prices go up!

Some forecasters predict that property values ​​will likely double from the market’s peak in 2006 due to inflationary pressure.

Understand this, if your home was worth $ 200,000 in June 2006, then within 5 years it could be worth more than $ 400,000. All this due to inflation. Take a look at history, the stock market growth of the 1920s led to the crash of the 1930s. The boom years of 2000 to 2005 in real estate drove national growth by 80% of GDP. This led to our bubble bursting this year.

So if the story is true, then it will be difficult to escape the inflationary pressure that this will bring to our nation. But the good news is that the housing market will prosper.

Leave a Reply

Your email address will not be published. Required fields are marked *