Home Prices: Up, Up, & Away
It’s hard to believe that home prices could get more expensive here in California, but they have. San Diego has posted the second-fastest home-price growth at 27.1%. That means the San Diego home that was selling last summer for $500,000 is now selling for $635,500. For many California homeowners that is good news since they are now sitting on top of a boat load of equity growth, unless of course you want to sell and buy another house. Our neighbor to the east in Phoenix, has had the fastest home-price growth in the entire USA for the 25th straight month – at 29.3%. Read about the quickest growing markets here. This explains why so many private equity companies have been jumping in and buying homes in many markets, but especially in Phoenix. It’s hard to fathom, but in the first half of this year corporate investors (Private Equity Companies) have purchased over 15% of the entire US for-sale home inventory – including entire newly built neighborhoods. How do they have the upper hand in a home bidding war? They can borrow money at 1-2% versus 3-5% for us normal homebuyers which contributes to why our middle class is shrinking by the day. Ultimately, to keep homeownership in the hands of people and to reduce homelessness we need to build more housing. We could build more housing tomorrow if government were to begin incentivizing home building, instead of putting up massive financial and other barriers.
