There has been an increasing pattern in real estate purchases in the previous couple of years. Homes have been selling like hotcakes, so to speak, and numerous have claimed that this real estate boom is far from being over. There are a couple of reasons that have been mentioned which give some insight into the present real estate market and why real estate sales are not likely to decrease for a long time to come.
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Building Business Not Thriving As Much As Real Estate Sales in Burwood
There are numerous reasons that the real estate market slows down. One such reason is because of an over-expansion of houses for sale. Although the home building business has been quite successful, it still has a ways to enter order to catch up with real estate sales. This is an advantage because there are not quite sufficient houses to meet the present need which will keep the market booming for a long time. So long as the supply does not swallow the need, the real estate market will continue to prosper.
Interest Rates Remain Affordable
While rate of interest have increased somewhat when compared with the previous number of years they are still fairly low and make lots of people wish to purchase a home. These appealing rates assist keep the real estate market going because most people need loans to acquire houses and low-interest rates make the general purchase more economical. So long as the rate of interest stay somewhat steady, prospective property buyers will still be expressing great interest in the purchase of a home simply because low-interest rates make the investment more economical.
Length of the ARM Fixed Rate Portion Is Increasing
For those who have adjustable-rate mortgages (ARMs), they may have fretted about the adjustable rate portion when their fixed rate portion was depleted. Just recently the fixed-rate portion of the ARM has been increasing with regard to the length of years in which it is active. This has resulted in stabilizing the real estate market and has likewise drawn in people to acquire a home through an ARM that has this new lengthier fixed-rate period.
Flipping of Real Estate in BurwoodNot As Prevalent As It Might Seem
Some people have been worried that turning of real estate, which is the purchase and fast sale of the real estate afterwards, is something that may cause the real estate bubble to burst. Nevertheless, those who have revealed issue can rest easy knowing that the percentage increase with regard to turning from 1998 to 2003 is only 1%. When seeing the general plan of things, a 1% increase within 5 years is not something that needs to cause excessive issue.
The real estate market has been doing quite well in the previous couple of years and the above elements combine to make what some belief is a real estate bubble that is sure to burst. Whether this real estate boom continues for a very long time to come is something which stays to be seen. Nevertheless, the real estate market seems to be remaining steady and while home prices may continue increasing supply is not exceeding need and people keep buying. So, only the future will reveal when the real estate market begins decreasing.