Consumer Confidence and Housing
Consumer confidence, which reached new heights the previous months, retreated slightly this past month as reported by the Federal National Mortgage Association (FNMA). The housing confidence reading of 90.7 was down 1.6 points from the previous month’s record high of 92.3.
One of the contributing factors in reaching historically high home price levels in the US, California, and Diamond Bar is the consumer’s confidence in the housing market. This consumer confidence was demonstrated this past month by the fact that 3.4 million Americans quit their jobs. Typically, people quit their jobs because they have the confidence that they can quit their current job and easily go find a better paying one.
As noted previously in this column, the current Median Home Sales Price levels continue to press upward. From the lows of 2010-2012, after the housing market crash of 2008, the median home sales price in Diamond Bar has risen by more than 50% in the last 6 to 8 years.
So why would consumer confidence scoring be of any importance to me as a homeowner, seller, or buyer? The answer is that the higher the confidence levels are in the housing market, the higher the probability is of a continuing upward pressure on property values. As a buyer, that lends a sense of confidence in moving forward with the purchase of the home being considered, as there is the increased possibility that one year later it will cost substantially more. As a home seller, the increased consumer confidence will affect one’s willingness to move forward with plans of selling the home, being confident that the price one believes they will get for the sale of their home will be supported by the housing market. Many home sellers over shoot the expected value of their home because of “news” tidbits they have heard about the strong real estate market.
Both buyers and sellers need to have a good estimate of value and for that they can go to their Realtor and ask for Comparative Market Analysis (CMA) on their property, or on the property they are considering purchasing. This will give them a greater sense of comfort in the true market value of their property. A CMA is one of the tools or methods that a real estate agent may use to arrive at an estimated value for a property.
This article was written by Nef Cortez who is a licensed Real Estate Broker, Ca BRE # 00560181, licensed since 1976. He can be reached for more information via e-mail at firstname.lastname@example.org, or website www.nefcortez.com. Please feel free to email any questions regarding real estate.