In the last 15 years, we’ve seen a roller coaster ride of real estate prices. About 10 years ago the market reached dizzying heights driven by an almost frantic demand. Less than five years later we had one of the most severe market corrections in memory as those lofty prices could not be sustained against declining demand and other economic factors. After becoming dizzy with the ups and downs in the market, we’re now able to catch our breath as the market returns to a more normal equilibrium.

According to this New York Times article, home prices have stabilized in the last 12 months, with growth that is more realistic and sustainable than the frenzy we saw in the mid-2000s. Home prices are rising at rates that are more in line with rental prices, inflation and incomes. When home rates were at their highest, some Florida residents were looking at home pricing that would require them to use 73% of their income to purchase a home. Today, similar homes would require about 30% of a person’s income, an amount that is more reasonable and recommended by financial planners.

The market is also normalizing as homebuyers are becoming more prudent in their decision to purchase a home, with younger buyers in particular being more cautious than before. Buyers are looking to purchase homes as long-term commitments and investments, with no intention of turning a home quickly. Although low mortgage rates have aided in making homes more affordable for the average American’s income, credit and down-payment requirements make the home buying decision one that takes serious thought and consideration.

What does all this mean for home buyers and sellers? With a saner, more stable market, sellers can more accurately gauge how much their home can bring and how long it may take to sell. Buyers can take the time to search for a home that best needs their needs for lifestyle, location and affordability.

If you’re looking to buy or sell a home, come in and see us. With our expertise, experience and knowledge of Ocala, Marion County and surrounding areas, we can help you get the most out of today’s real estate market.

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