As we all know by now, home prices have surged mightily this year. Some are asking if we are in for a letdown. They worry interest rates will go up and force prices down.
We just came through a bump in interest rates and it seems to have merely spurred prices. After a brief lull, buyers are back in the market more ferocious than ever.
Prices are still at 2003/2004 levels but interest rates are considerably lower. A home bought today actually costs less than one bought almost 10 years ago. There are many who feel the time to buy is now while rates are low and before prices return to higher levels. Lenders are even starting to loosen their requirements giving more people the means to buy.
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At worst case, the market could slow but there is no near term reason to expect actual declines in prices. In fact, signs all point to continued increases. We still attract foreign buyers and our youth is beginning to move out on their own. A bad economy kept many of them home but the tide is turning and they want to get in while they can.
