The Future of Real Estate

i know this has been discussed before and although no one can predict the future, just wanted your thoughts.

in the past couple of years, homes have appreciated 10-15% a year. people have rationalized that that the reason home prices are at an all time high right now is due to low interest rates. however, i tend to somewhat disagree. IMO, the market (low supply, high demand) is to blame and not just the low interest rates.

as DH and i house hunt, we try try to think w/ our heads and not our hearts. we look for value (location, SD) over perfection (new construction).

i am just having a hard time trying to understand the market. what are we going to
faced w/ in 3-5 years?

if the 10-15% appreciattion rate remains, i cannot fathom the dumps that sell today for $500,000 will be worth $750,000 in 5 years. i am using the term 'worth' loosely.

i just don't get it!!!

ETA: i have to blame the buyers as they are the ones driving the market here on LI. supply is low and demand is high, but these prices and what people are willing to pay just boggles my mind.

Re: The Future of Real Estate

We've been looking a few months and in the process have spoken to many real estate people, mortgage brokers, financial professionals, etc. and they all seem to have the same opinion - but it's just opinion so take it for what it's worth.

Prices are leveling off now (and in lot of cases houses that have been on the market awhile are reduced dramatically) but a large part of that is that it's the Fall going into winter - best time to buy. The flip side is that not many new homes come on the market because people want to be in their homes and not move at the holidays.

In the Spring, I think house prices will be just as high, but not too much higher. Houses will always appreciate over time but over the next few years I DEFINITELY think appreciation will slow down a LOT from what it has been. My dad advised me that I should really focus on location because that will be the true indicator of whether we get our money back, and how much.

I am so worried about the same thing as you - I buy a crappy house now (that costs 500K!) and then guess what, in 3 years it's still only worth 500K!

Re: The Future of Real Estate

THANK YOU!!!

i haven't even asked the 'experts' opinoins, just basing my thoughts on logic (LI is over crowded, not enough homes to meet the demand). due to the lack of buildable land, this is NOT going to change. i do agree that this (Fall/Winter) is the time to buy as we have negotiating power (season, not market). i CANNOT even fathom what the Dpring/Summer will bring.

however, something has to give. this CANNOT continue. or can it? is LI the next san fran?