Valley News -

By Barbie Bennet
Special to Valley News 

Learn the anatomy of a housing 'bubble'

 

Last updated 9/14/2018 at 3:04am



Homeownership continues to prove to be the best investment toward building personal wealth and financial stability. Equity is steadily growing, giving sellers the chance to get the most for their home.

Many potential sellers see the asking price of their neighbors’ home and get excited; however, with no guidance it’s like watching a dust devil manifest. New listings hit the market with unjustified asking prices “pushing the envelope” as to how much they can get for their home. Those prices are used to set asking price for newer listings, and so the bubble begins.

At the same time, buyers face rising mortgage interest rates, which severely cut into their buying power and what they can afford. Unless buyers are getting pay raises that match the increase in their monthly mortgage payment, they are not able to make the financial stretch.

Earlier in the season, the amount of available homes on the market suddenly went from few to flooded overnight. While there is still a shortage of private pool homes in the area, over-priced inventory is sitting. In addition, the market is seeing more price reductions and expired listings daily.

These are the elements that create the ‘bubble’ or the difference in asking price, market value and appraisal value. Agents who are letting sellers set the price are doing a disservice to their sellers. Without reviewing the actual sold numbers or coaching from a trusted experienced agent, sellers have participated in the creation of the current real estate bubble.

So then, how does the bubble pop? In a word or two, “price adjustment.” Make no mistake, while I am all for getting homeowners the absolute most for their property, nobody wins when the property does not sell.

Barbie Bennett has been a full-time real estate agent since 1999. Her extensive market analysis and evaluation experience comes from her passion for real estate, hard work and hands-on experience. Banks and asset management companies contract her for price opinions and recommendations on their real property. Bennett continues investing in further education to offer more to homeowners. Through the National Association of Realtors in 2016, she earned her green certification and has extensive knowledge of how to market solar and energy-efficient homes. Reach her daily at (951) 795-0180 or [email protected]

 

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