Is The Real Estate Market in Montclair and Nationally Finally Bottoming Out? Post 2
In our last post we asked the question whether the real estate market in upscale communities like Montclair New Jersey, Manhattan NY, and Los Angeles CA are slowing down.
We explored some of the indicators that may indeed forecast a slow down in real estate in these in-demand areas. We cited some real estate experts in our last post.
They claim that the rental market is already showing signs of this behavior. For the first time in years, it has become cheaper for families in the US to rent a house rather to own it. They point to the fact that this behavior has been in evidence across several major US cities for some time now. The rising interest rates have been blamed for the emergence of this scenario. Their data is especially pronounced for the high-end segment of the real estate market in cities like New York, San Francisco, Washington, and in areas like southern California.
Even the prospect of gaining a valuable tax deduction through a mortgage is not tempting families into buying homes (this had always been a big incentive for buyers in the past).
In fact, the data points out that renting a house, rather than buying one, can save, on average, thousands of dollars in a year. They claim that a scenario is emerging where the supply now outstrips the demand, and therefore, the market will bottom out. This is especially true for the apartment market. They predict that even homeowners will begin to sell off their homes to move onto rentals because it will just make much more financial sense. If this disturbing trend is replicated across the country, we will be facing a major real estate slump in the future.
Others experts believe that the market is very stable and much too heterogeneous for any single consensus or trend to predict its rise or fall. We will continue to discuss both sides of this forecast in our next post.
We explored some of the indicators that may indeed forecast a slow down in real estate in these in-demand areas. We cited some real estate experts in our last post.
They claim that the rental market is already showing signs of this behavior. For the first time in years, it has become cheaper for families in the US to rent a house rather to own it. They point to the fact that this behavior has been in evidence across several major US cities for some time now. The rising interest rates have been blamed for the emergence of this scenario. Their data is especially pronounced for the high-end segment of the real estate market in cities like New York, San Francisco, Washington, and in areas like southern California.
Even the prospect of gaining a valuable tax deduction through a mortgage is not tempting families into buying homes (this had always been a big incentive for buyers in the past).
In fact, the data points out that renting a house, rather than buying one, can save, on average, thousands of dollars in a year. They claim that a scenario is emerging where the supply now outstrips the demand, and therefore, the market will bottom out. This is especially true for the apartment market. They predict that even homeowners will begin to sell off their homes to move onto rentals because it will just make much more financial sense. If this disturbing trend is replicated across the country, we will be facing a major real estate slump in the future.
Others experts believe that the market is very stable and much too heterogeneous for any single consensus or trend to predict its rise or fall. We will continue to discuss both sides of this forecast in our next post.
posted by Dadpreneur Productions at
11:14 PM
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