Home values are going through the roof all over the country. It is clearly a seller's market almost everywhere. It is happening because mortgage interest rates are very low and we are short 4 million housing units in the nation. So this is clearly a supply and demand issue. The demand is high. The supply is low, which is driving up prices. According to Red Fin, the markets with the highest appreciation this year have been Phoenix, Las Vegas, Sacramento, Austin and Miami. In all case, homes have appreciated by double digits in these markets.
So, what is a buyer to do. In places like Reno, where I live homes are selling in a week or two with multiple offers bidding up the price often above list price. First time home buyers with little to put down are out of luck because sellers will only accept offers with high down payments and often with no contingencies. Buyers should get a home inspection anyway just to know what you are buying even if the seller refuses to make repairs.
Many buyers should perhaps sit it out and wait for sanity to come back into the markets. The only problem is that eventually mortgage interest rates will go up. So though the home values may come down a bit, if rates go up the payment could end up being more. So, this is a damned if you do and damned if you don't situation. At least once the market cools, there may be more homes to choose from than there are now.
