Why Higher Housing Prices Are Good For The Country
No consumer likes it when things cost more than they used to. Trying to buy a house at a higher price isn’t pleasant either. And yet, it always seems like the news is good when it’s being reported that the price of houses is going up. What’s going on?
Housing is one of the few industries where seeing average higher prices is indicative of a strong economy; the other is the stock market.
When home prices are higher is often means that more people are making enough money to buy homes, new or preexisting. If you notice, the unemployment numbers started coming down around the same time that the price of houses went up and foreclosures started to level off.
Higher priced homes also mean that home builders can feel comfortable to start building new neighborhoods, which always increases property values and allows communities to tax land at a higher rate. When that happens, even though we don’t like it all that much, it means that our communities are thriving and we get more and better services locally.
What’s also good is that property becomes a good investment again as the value of existing homes goes up. Even though I personally live in an area where home prices were pretty stagnant while property values were falling everywhere else, in the last year the value of my house has gone up around $7,000 as the economy has improved. Well, at least Zillow says so, which means you take it for what its worth.
Take a look at some of the communities that were dragging drastically in the past few years and how things are turning around for them. Sure, there are some great deals for homebuyers in places like Phoenix and Las Vegas, but just 2 years ago those houses could have been bought much cheaper, even with the banks falsely inflating their prices by keeping some homes off the market.
Of course, it depends on where you’re talking about as to whether or not your community is benefiting from it. For instance, Chicago area home prices jumped 11% in November, the highest increase in 30 years, while Charlotte NC prices went up 8.7%. Compared to a year ago, home prices in 20 top cities rose 13.7% from last year.
Of course there’s always a killjoy somewhere, and in this case average home prices did decline .1% from October, which was the first decrease in a year. Still, things are looking up, the economy is doing better, more people are working and there are plenty of homes ready to be scooped up by eager buyers. Just make sure you’re being cautious if you’re thinking about buying a home.