Zillow forecasts that prices in some U.S. home markets will decline in the year ahead while far more communities will see a further increase in prices. This effect may disrupt communities, especially ours here in lower income rural Cumberland County.
I only follow real estate investment for clients in the Delaware Valley region and it seems clear that the lowest priced areas are most likely to increase rapidly. I’ve gone as far as to predict that certain rural South Jersey towns as possibly being among the best real estate investment opportunities in the nation now.
That’s both good and bad for us locally. We should prepare for disruption of status quo in communities ahead triggered by an influx of investment money from outside the community.
I have had to assist several small business clients who were forced to postpone business expansion because sellers hiked commercial land offer prices. We are now already seeing the same effect in recent residential home market. Listings this past month and seller expectations are far above the historic and forecasted price range in several local markets. I’ve written about a few experiences I’ve had about price shock recently. This new listing in the photo is chosen at random to show this effect. The market value is estimated at under $90,000 but the listing is $160,000. Another home in my own neighborhood has the same ratio of estimate to offer price but at four times this amount. An offer closer to the appraised value was rejected. It’s an odd and unprecedented situation for this region.
