Rent prices aren't up year over year nearly as much as housing prices. But if you enjoy cash flow, hanging onto your properties makes sense.
Regarding acquiring new property, it'll probably be tougher than usual to get a good deal, even if you're a cash buyer, as competition is stiff. If, however, you own property in expensive coastal cities such as San Francisco, Portland, or Seattle, you might want to get the best of both worlds and sell the expensive properties and then invest in less expensive locales in suburban settings, such as Boise, Idaho; Memphis, Tennessee; or St. Petersburg/Clearwater/Tampa, Florida.
What policymakers might do
Policymakers tend to regulate, but too many regulations impede business. When there are too many regulations and too much uncertainty regarding whether a building project will be approved due to zoning or other regulatory rules for the area, there tends to be less building happening.
To get more housing, which would lower the price of homes, there needs to be an environment that encourages new builds. The simpler and shorter the development process is, the more likely there will be development, according to the Brookings Institution.
The Millionacres bottom line
As housing prices continue to soar, expect politicians who never let a good crisis go to waste to try to pass new laws or regulations. Sometimes new laws are helpful, but many times they create unintended consequences. Investors should pay attention to the latest developments regarding the rise in home prices, as that can help determine an action plan.
All data and charts supplied by Housing Tides by EnergyLogic.