With home prices expected to increase by over 5% this year, some worry about a new housing bubble forming. Here’s what Warren Buffet has to say:
Warren Buffet addressed the issue this month in an article by Fortune Magazine. He simply explained:
“I don’t see a nationwide bubble in real estate right now at all.”
Warren Buffett says now is a good time to buy a house, though not as good as it was four years ago. Still, Buffett says he thinks the chances of housing prices collapsing are very low. Later, when questioned whether real estate and/or mortgaging could present the same challenges for the economy as they did in 2008, Buffet said:
“I don’t think we will have a repeat of that.”
What factors are driving home prices up?
It is easily explained by the theory of supply and demand. There is a lack of housing inventory for sale while demand for that inventory is very strong. Many Orange County cities are in a Seller’s Market (where significant demand leaves little inventory available).
Also, in NAR’s latest Pending Home Sales Report, it was revealed that the index was the highest it has been in a year.
What does the future bring?
As prices rise, more families will have increased equity in their homes which will enable them to put their home on the market. As more listings come to market, price increases should slow to more normal levels. With more properties coming available in Orange County, market conditions are mildly positive.
Anand Nallathambi, President & CEO of CoreLogic, recently addressed the issue:
“Home price gains have clearly been a driving force in building positive equity for homeowners. Longer term, we anticipate a better balance of supply and demand in many markets which will help sustain healthy & affordable home values into the future.”
About Jaleesa Peluso, Orange County Realtor
Jaleesa and her real estate team specialize in Laguna Beach and Coastal Orange County real estate. We connect home buyers and sellers anywhere between Newport Beach, Costa Mesa, and Irvine down to San Clemente. Thinking of making a move in South Orange County? Call us now at (949)395-0960!