Gas prices going up = Time to buy a house?

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Why are gas prices increasing? While tensions with Iran are part of the equation, other factors are playing a bigger role in the increase of gas prices including the US economy is growing, unemployment is decreasing, and optimism that the European countries may have reached a solution in the debt crisis.

What does this mean? This could be a leading indicator the economy is getting ready to expand into a faster growth phase of the recovery. This would create price increases across the board since it seems that everything we buy either directly (or indirectly) uses gas.

Now to the point… higher gas prices is just another signal housing prices will begin to recover. This will only increase the cost of new construction and widen the gap between new construction and resale. The resale market should increase in value as the cost of new construction goes higher by creating a greater value proposition which should increase demand to this category. In addition, lower unemployment numbers will increase the number of people that can qualify to purchase a home.

Some will say, “wait, but what about the foreclosure inventory.” I agree! We have some inventory to work through, but the foreclosure rate is slowing. We are starting to work off the inventory. I would hate to see buyers miss the opportunity to purchase a home during a time when prices are the lowest in the last 10-15 years. We are at the bottom of the market. When the real estate market turns up, do not be surprised if you see a double digit increase in values that first year.

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One Response to “Gas prices going up = Time to buy a house?”

  1. Priscilla Says:

    The reason for the gas prices going up is because of what is going on in Iran,which will in turn slow the economy down again,so I don’t understand where your coming from . With gas prices headed toward $5 a gallon,how do people feel motivated or secure in a decision to buy a home?

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