Even though we are now in a hot market with lots of properties drawing multiple offers once listed for sale in our area there are still naysayers convinced we have had our equity run up for this cycle. My question to those is this, “Does history repeat itself?” The answer is yes it does, perhaps not exactly but real estate cycles have some similarities.
This cycle is mimicking the 1970’s already. In the early 1970’s the equity run up came fast and furious and when it was over our equity had increased 300%. Prices were 300% higher for buyers at the end of the cycle as at the beginning. So far this year, in the first three months, we have gained 10% on average with no sign of slowing down. Remember, interest rates were much higher in the 1970’s also. This market is the perfect storm with low rates and prices to make both home sellers and buyers both winners.
Broker for Abercrombie Fine Homes Inc.
Past President of the Santa Barbara Multiple Listing Service and Association of Realtors