Our resort and second home real estate market continues to be under appreciated offering opportunities for buyers to purchase resale properties at prices that are anywhere from 10-20% below what it would cost to duplicate them. If you have an interest Wintergreen real estate or Stoney Creek real estate, follow the link below to read more.
Specifically, the national housing market has too few people selling their homes compared with the number of people who want to buy homes, according to a recent report from Standard & Poor’s/Case Shiller.
This is consequently driving home prices up, which in some cases is making available homes for sale unaffordable to buyers.
It’s certainly a unique situation and one that both home buyers and home sellers are going to need to learn how to navigate in the coming months.
Recent National Housing Market Activity Explained
Here’s what we know based on the recent Standard & Poor’s/Case-Shiller 20-city index:
- Last year saw a 13.4 percent jump in the average price of a home sold.
- Average prices nationally are expected to increase by single digits this year.
- The gains are expected to be the strongest in those cities with strong job growth, including Seattle and Austin.
- Meanwhile, lenders are beginning to ease barriers for those with less-than-ideal credit, meaning that these home buyers could find it easier to qualify for a mortgage and buy a home.
- Currently there are about five months worth of homes on the market, compared with 5.9 months in 2012 and 8.3 months in 2011.
- Part of the explanation of low housing inventory is the fact that about 19 percent of home owners remain underwater on their mortgages, which may deter some sellers from listing because their sales price may be less than what they owe.
- And an additional 37 percent are “effectively underwater,” which means that their sale would not be enough to cover the cost of listing their home as well as putting a down payment on a new home.
- But luckily, warmer weather, job growth and a more robust economy are expected to help encourage more home owners to list their properties this spring.
Experts also believe that the rise in home prices will help the problem correct itself. After all, as sales prices continue to rise, it will lure more home owners to list their properties.
This in turn could lead to more listings, which might ease the bidding wars among buyers and help lower sales prices to make them more affordable.
And That’s Paramount to First-Time Home Buyers
After all, this segment of the market really fuels market growth and promotes overall market health.
But right now, these first-time home buyers are buying fewer homes because of lack of affordability. For instance, they purchased 1.5 million homes in 2013, which is about 500,000 fewer than they would have typically, on average.
Still, that situation appears to be improving as well, albeit slowly. For instance, about 738,000 people ages 25 to 34-year-old found jobs in the past year, meaning they will have more disposable income and financial power to buy their own home
Add to that the fact that mortgage companies have eased their lending standards slightly to reach a larger audience and you have the right conditions for a greater housing market recovery.
Keeping An Eye on the National Housing Market for You!
We hope you found the above information helpful as a home buyer or home seller. We definitely believe that one of the surefire ways to have a successful outcome on the local housing market is to stay informed about what’s going on at the national level.
Check back again here soon for further updates. For now, we hope you have a great day!
That’s because national real estate experts are projecting that this spring will see even more home buying activity than is already expected for this time of year.
Why? Because of pent-up home buyer demand from the unusually cold winter we had. Home buyers who might have navigated the market in late 2013 and early 2014 ended up holding off because of the bad winter weather. Can you blame them? House hunting in frigid temperatures while trudging around in the snow and bad weather is no fun at all.
So now that it’s warming up outside, these home buyers – along with those who would have normally entered the market in spring – are flooding the real estate market.
More Trends to Expect This Spring on the National Housing Market
According to a recent Bloomberg article, the spring home buying market (which usually runs from March to June) was delayed because of the unusually bad winter we’ve had across the country.
This late start meant that home sales declined in February to the lowest level since mid-2012. And the number of contracts signed reached the lowest level since 2011.
Meanwhile, applications for mortgages to buy homes dropped to the lowest since 1995 during the month of February.
While this may all indicate a slowdown, experts are saying that a lot of this activity was related to the unseasonably bad winter. Consequently, they expect home buying to surge over the next few months.
Here are the predictions provided by real estate market experts:
- Sales of existing homes will increase to 5.14 million in 2014, compared with 5.07 million last year.
- Mortgage lending will total $661 billion, compared with $652 billion last year.
- The average U.S. rate for a 30-year fixed mortgage will continue to rise from last year’s figure, when it was 3.57 percent.
- First time home buyers will continue to increase in the market. For instance, in January, they made up 26 percent of the market. And in February, that figure rose to 28 percent.
- The inventory of available homes will decrease. As of recently, the inventory was at 5.2 months.
- Some markets are leaner than others. For instance, in Boston and Boulder, the number of homes for sale in February was down about 30 percent from the year before.
Keeping You Updated With the Real Estate 411
Happy spring home buying season to all the sellers out there! It’s definitely a great time to capitalize on the home buying energy and get a great price for your property.
And make sure to check back here again in a couple of weeks. You’ll be provided with even more news that will aid you as you navigate the market.