For the past many months, real estate prices in the US have been on a record high and continue to rise. Although, lower mortgage rates and easy loans facilitated real estate purchase for the longest period, it becomes harder and harder to buy property in the country as time passes. The reason is that economic growth and income are not proportional to the change in property values. Those who have already purchased property are likely to see the benefits in the coming months as prices are expected to exponentially rise throughout the nation.
However, it does not imply that the trend would continue for long. Since sales are always driven by demand, it is vital that the demand stays high for property value to rise. In fact, recent surveys suggest that every year the number of people that prefer cash investments over real estate investments increases. At present, only 23% of Americans prefer to invest in real estate and that too upon the condition that the investment period is no longer than 10 years. The common 20 to 30 year mortgage plans are likely to lead towards a decline in property sales.
Studies suggest that even though the federal government invests $450 billion into real estate in order to provide Americans with affordable housing opportunities, that amount is uncoordinated. By the end of 2014, the demand for property is expected to witness a decline and consequently the prices would also come down. The change could be surprising to many since the current months enjoy property appreciation percentages in double digits.
If the federal government takes additional steps, the appreciation or depreciation could accelerate. Given that the current economic situation continues, a stagnation point will be reached in time for real estate owners, from there on the prices would see a negative slope.
There might be many real estate owners who expect property values to continuously increase, but they may get disappointed if the property is not sold within the next year or so. On the other hand, the ones who have been saving to get a piece of property, the socio-economic conditions are expected to get better in the coming months which would present a better opportunity of purchasing in the next two years.