Fast and furious certainly defines the housing market today. What an excellent analogy when it comes to today’s real estate. The first five months of 2013 has had a similar feel to the roaring early 2000’s when sellers were in complete control and buyers were pursuing homes at a frantic pace. We are just now moving into what normally would be the selling season, no telling what the summer months will bring. There are many factors for the housing resurgence. Let’s look at a few factors that have turned the real estate market from fizzle to sizzle.
Lack Of Inventory: This is the most important reason for the turn around. When you have a one or two month supply of homes for sale at any given time and more buyers than homes available, this creates a supply and demand that favors the seller. Most indicators say it’ll be slim pickings for home buyers when it comes to home choices this summer and throughout the rest of 2013. Home prices have increased and the lack of inventory is the main component for that hike.
Uptick In Mortgage Rates: The combination of steady mortgage rate increases and the lack of sellable properties has changed the buyer’s perspective when it comes to buying a home. Patience is no longer a virtue for those determined prospects that want to buy a property before both rates and home prices move higher. One of every four homes selling are purchased with all cash, but for those that need financing, this is the time to get a loan before rates move higher.
Fewer Short Sales/Foreclosures: The past gluttony of short sales and foreclosures brought the housing market to a screeching halt and prices plummeted. The number of distressed properties have shrunk this year compared to the last several years and stagnant home prices have made a steady climb with fewer short sales and foreclosures to compete against.
Home Buyer Confidence: Lessons were learned by buyers, lenders and the real estate industry as a whole from the housing collapse. Lenders are less likely to give loans to questionable applicants and 20% down payments are now the norm. There are still programs for those buyers with less than the desired 20% down, but there are more stringent guidelines than in years past. Buyers feel compelled and confident with buying a home again. The lessons learned from the recent past are much less likely to be repeated by todays home buyer. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.