After returning from Sacramento earlier this month to attend the (CAR) California Association of Realtors business meetings, there has been a lingering trend that has emerged throughout not only San Luis Obispo County and the Central Coast, but seemingly the vast majority of the state. “The Bottom Has Been Set” was the primary theme of the presentation given by Mr. Joel Singer, the CEO and Executive Vice President of CAR, one of the largest state trade organizations in America.
The combination of record low interest rates, increasing affordability, growing consumer confidence, and the declining inventory of homes for sale have been the primary drivers of the current shift in the real estate market we are experiencing today. Entry level buyers are now facing more competition that ever for the shrinking supply of the available homes. Sellers in most market segments that price their homes aggressively are receiving multiple offers in the first week. In some extreme instances buyers are up against as many as 40 other offers for a single home.
Based on the fundamental economic model of price determination of goods in the market, if demand remains constant while the supply decreases, this will lead to a higher equilibrium price. The inverse being true when there exists a glutton or oversupply of goods without sufficient demand, ultimately bringing the equilibrium price down. That being said, if the current climate in the Real Estate market continues we will see upward pressure being put on prices resulting in the much needed steps to recovery and ultimately see legitimate appreciation in values.
If you are looking to buy or sell in this market it is in your best interests to hire an active, professional Realtor to enure your ultimate success. Call us today and experience the difference!