Realtors
were hopeful that 2013 would begin on a high note with an increase in sales and
listings, and boy have we seen them recently! Perhaps due to the avoidance of
the fiscal cliff or building off the momentum of the past few months, the
housing market is coming back well ahead of some economist’s estimates. While
this is good news for realtors and those looking to list, could some buyers
actually be priced out of the market if they wait too long?
While the
recent rise in the market may seem too fresh and unstable, some markets in the
U.S. are seeing huge recoveries right now. The Phoenix area saw an increase of
sales at 21.7% according to S&P Case-Schiller Data last month, with hard
hit areas like Detroit, Miami, and San Francisco not far behind. The result has
been a sharp incline in prices for those areas, as home owners discover the
supply and demand to be in their favor. Sadly this means that some potential
home buyers may find themselves unable to afford homes that they may have been
able to only a few short months ago.
J.P. Morgan
is now forecasting overall increases of 3-4% in home prices for 2013, but like
the above cities, many areas are already seeing these increases before the
spring selling season even begins. This winter has been hot for home sales as
many buyers begin to see the signs that historically low housing prices are set
to take off this year.
Not all
cities are seeing the rapid growth of Phoenix or Miami though; The same index
saw a small drop in the New York and Chicago areas. Boston, and our friends in
Cleveland only saw gains around 2%, meaning buyers are much less likely to make
the jump into something new right now.
The biggest
plus right now for people who are unsure about purchasing this year: You
guessed it, those great rates on mortgages, which financial analysts are predicting
will stick around for almost all of 2013. The 30-year fixed mortgage rate is
expected to remain under 4% for most of the year, but could move a little lower
or higher depending on market conditions.
Real Estate
site Trulia is saying that the market is “51% back to normal” for the month of
November, based on a 6% increase in existing-home sales. The wildcard for the
2013 housing market will be the so-called “shadow inventory” of distressed
homes that number in the 2.3 million and at the current pace of the market even
out to a 7 month supply. Analysts will be watching to see how quickly these
homes sell and for what prices to determine the rise in housing prices in the
coming months.
New sellers
listing their homes and builders adding to the supply will also have an impact
on the market. While we’re seeing a little bit of an uptick in listings after
the first of the month, we really won’t know what’s going to happen until we’re
well into spring. If there is an increase, prices may not rise as sharply and
homes may remain more affordable. Not only will buyers find it easier to afford
a new home, but bidding wars will be easier to avoid.
Other
factors affecting the market include the fear over cutting of the
mortgage-interest tax deduction, which survived the fiscal cliff talks but may
be up for grabs again when congress begins talking debt ceiling towards the end
of the month. Many lawmakers support it’s cut, which could raise the overall
cost of home ownership. Another point is the low vacancy/high prices associated
with renting right now, leading several potential buyer to consider home
ownership more seriously.
No matter
the conditions or your own budget, there will always be wonderful homes in your
area that could be the perfect match with the help of the right realtor.
