Real Estate Roller Coaster

July 9, 2008 · Mark Hasha

Is the Bay Area real estate market on its way back up or is it still coasting down?

On June 25^th the CALIFORNIA ASSOCIATION OF REALTORS® reported that home sales increased 18.1 percent in May in California compared with the same period a year ago, while the median price of an existing home fell 35.3 percent. So is that good news or bad for S.F. bay area real estate market? It depends.

If you need to sell your home the bad news is that your home may have given back any appreciation it had made over the last three years. The good news is that if you have owned your home for more than three years you should realize a gain on your home sale; it just won’t be at the top of the market. If you are selling your home to buy another, then more good news, your next home will cost less than it would have a year ago.

Have you thought of buying investment property in the past but the numbers just didn’t make sense? Good news, with the decrease in the prices of homes and the strong rental market due to over extended home owners returning to the rental market you can once again find properties that can generate enough income to cover expenses and offer good returns on future appreciation.

Despite all the confusing information in the media, the best news I got from the California Association of Realtors report was that home sales have increased. Real estate operates on the law of supply and demand and as the number of home sales increase, inventory will begin selling off and prices will once again return to stability and the long term appreciation will occur as it has always done in the past.

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Filed Under Local Trends, Real Estate for Buyers and Sellers, Real Estate in the News