How Long Will This Market Last?

Anything is possible in regards to our marketplace, however, this is the 4th year of double digit increases and I am wondering how long these property values can be supported.  Currently only 22% of Alameda County residents can afford to buy a home.  This is an election year and if you wait until the end the year to sell your home things could change in the real estate market depending upon how the election goes.  In my experience, property values are driven by a combination of supply and demand, interest rates, jobs, consumer confidence, rent prices and crime rates.  If you decide to sell it should only be if you are really done with your home.

 Real estate market report from KTVU news

Real estate market report from KTVU news

In regards to buying a home, economists do think there will be a market correction in the next couple of years.  I am recommending that all of my buyers buy for the long term.  Think of your equity as ghost equity, meaning it doesn't matter what your home is worth until you are ready to move on and sell.  When the market does correct, I do not think people will walk away from their loans like they did before, because many people are buying with heavy cash these days and have a considerable amount of capital in their homes.  

I recommend now (as I have for the past 11 plus years), buy something that fits your needs for 7-10 years or more.