It's the middle of a blustery February, the daffodils have yet to poke their way up through the soil, and the spring real estate market is in full swing in Cambridge and Somerville. Certain kinds of properties (condos in Mid-Cambridge, for example) are so sought after, that demand exceeds supply. Naturally, sellers of these properties are able to command a favorable price, often as buyers compete to put in the highest bid. I'm not making this up.
With all these buyers poised and ready to pounce, selling prices remain steadily high. But besides simple supply-demand mechanics, there's another force behind prices of goods in general that applies itself well to real estate: inflationary pressure.
There is a good chance -- good enough not to be ignored, that is -- that the swell of money about to released into our economy by the latest stimulus legislation will result in inflation. On paper, it seems impossible for this not to happen. Inflation is a dirty word of sorts, but it's also an unavoidable side effect of rebuilding the economy. The least we can do is take advantage of it. Here's how.
The bottom line is that "home prices won't be this low again in your lifetime," a conclusion made by Mike Parker for RIS media. He reviews the history of inflation in America since the Carter administration and applies the finding that inflation can result in a tremendous profit for whose who buy real estate before the inflationary period and sell after.
Low interest rates, low real estate prices and a good chance of inflation form a compelling trinity of factors that say: if you can buy real estate now, do it!