The real estate market has received significant attention during the past year. The price of houses has increased significantly, leading to several significant impacts. Jean Francois Desormeaux is here to review the impact of the real estate market on buyers and sellers. That way, everyone can educate themselves and make appropriate decisions for their financial futures.
A Lack of Supply of Homes
Jean Francois Desormeaux believes that many of the changes in the real estate market have been driven by a lack of supply of homes. When looking at the average time houses spend on the market, it is evident that there is a lot of demand right now. Unfortunately, there are not many supplies to meet that type of demand. Construction companies are having difficulty building new houses because they don’t have access to contractors or the supplies they need to build homes. Many of the supply chains have been disrupted by the pandemic. Furthermore, many people are reluctant to sell their houses right now because they are worried they will not be able to find a new home.
Rapidly Rising Housing Expenses
Jean Francois Desormeaux knows that this, unfortunately, leads to rapidly rising housing expenses. For example, many members of the younger generations are looking to purchase houses for the first time. Sadly, they don’t have the financial capital to compete with older individuals who might be able to make a cash offer. As the price of houses increases, they become less affordable for people looking to break into the market for the first time. Even though it is nice that interest rates are relatively low, some people are still having a difficult time affording a house.
Concerns About a Bubble
Jean Francois Desormeaux explains that the real estate market has increased in value rapidly during the past year. Many people are concerned that a bubble might form. A bubble occurs when prices rise significantly only to suffer a sudden drop on the other side. The same thing happened in 2008. It is impossible to predict whether a bubble is forming, but it will be interesting to see how home prices react when construction companies start building again and when interest rates rise.
The Future of the Real Estate Market
These are a few of the most important aspects that have driven the changes witnessed in the real estate market. Similar to other markets, the value of a real estate can rise and fall with time. Real estate values have increased dramatically during the past year, and some people are concerned that a bubble might be forming. Eventually, supply chain issues should start to ease, making it easier for construction companies to build more houses. As supply increases, the real estate market should cool off. Jean Francois Desormeaux says that it is only a matter of time until the real estate market pulls back, but some home values could be here to stay.