Some experts predict that this year will be the last chance for home buyers to cash in on the weak housing market.. That’s both good news and bad news. The good news is that it seems like the real estate market has started its journey toward recovery. The bad news is that if you’ve been waiting until we hit bottom, you’re too late. It appears that the real estate market started its upward trend. Homes may never get any cheaper than they are now and this year might be your last chance to cash in the some of the best residential real estate deals.
The market has been sliding down since 2006 and home prices are down approximately 34% since 2006. Mortgage rates are at historic lows and have never been more affordable — but as previously stated, it won’t stay this way for much longer. Home prices have either flattened out or started their climb up.
A number of factors will help bolster the housing market. Some include:
- There’s been a decline in the number of foreclosures
- Continued job growth
- Home buyers have better access to mortgages
- Mortgage rates are extremely attractive
Asking prices have already increased 1.4% in the first quarter of 2012 as compared with the last three months of 2011. There are differing opinions regarding the future of foreclosures. Stan Humphries, chief economist for Zillow feels that foreclosures have started to fade and that the percentage of mortgage loans 90 days late or greater is a good predictor of future foreclosures. That percentage is falling fast.
If you’ve been sitting on the fence and are not ready to buy now, don’t panic. Home price are headed upward but there not expected to make a giant leap. Initial price gains should be modest in most markets. One thing keeping prices from making a giant leap is that the number of foreclosures may spike as banks begin expediting foreclosures as a result of the new guidelines that have just been established. The foreclosure backlog should move more quickly now that the guidelines are in effect.
Many investors have been buying up foreclosures, fixing them up and renting them out. Many times they rent to the people who were foreclosed upon. This is a factor that has probably helped prices to go up on foreclosed properties.
Home buying has become cheaper than renting which influences rising prices. “It’s crazy,” said Tanya Marchiol, founder of Team Investments, a Phoenix real estate investing firm. “Property that I was selling six months ago for $60,000 to $80,000 is now $90,000 to $110,000.”
You can kiss the 3.8% mortgage goodbye. For the past six months, mortgage rates have been at record lows, but as the economy begins its recovery, mortgage rates are expected to climb. They will probably stay pretty reasonable for awhile. 30-year fixed will probable hit 4.5% by the end of the year according the The Mortgage Bankers Association. Greater demand for loans will probably help fuel the increase.
People can now see the light at the end of the tunnel and that can be enough for them to “Get Off The Fence”
Typically, those looking to buy in the Over 55 Communities generally wait until they’re ready to return. In that case, you may want to start looking prior to the next Over 55 season. Homes prices may have gone up already as We’ve Already Hit Bottom. You may care to monitor the homes available in Active Adult Communities and evaluate the price trends.
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