The housing market is making a recovery in all states, and some are doing better than others. Rates were low to help spur everyone from investors to consumers to borrow and spend more. The Mortgage Bankers Association noted that in 2012, refinances made up 71% of all mortgage originations. So the low rates have been great for existing homeowners but not so great for new homeowners.
That may change over the next year.
The Hot Hot Hot Markets
Bidding wars are back in some of the nation’s major housing markets including San Francisco and Sacramento metro areas. One home in Elk Grove received 62 separate bids, and the final sale price was well above the asking price.
Buyers are eager to purchase before home prices really start to increase, and before mortgage rates rise.
In addition, there are homeowners who were hoping for a profit, but now just want to sell for what they purchased and move to a more affordable residence.
If you’re trying to buy in a hot housing market, a reputable Realtor will be able to help you put together a proposal that gets noticed.
Why So Hot?
In February, the National Association of Realtors reported a 19.2% decline in inventory year-over-year. Normally, you’d expect the number of homes for sale to rise in the Spring, but they’re forecasting lower inventory which will push prices higher.
New home construction is still moving forward slowly. After the housing bust, many contractors had to walk away from a number of developments. In addition, the cost to build the home is often more than what the property ended up selling for (per Jeff Culbertson, president of Coldwell Banker’s Southern California operations)
Zillow analyzed 260 metro areas of which 239 hit bottom and are climbing back out. Out of the 21 left, Zillow predicted 9 that won’t hit bottom before 2014. If you’re a home buyer, this means you still have time to buy into these areas. If you’re a current homeowner, it could take longer to get out from being underwater.
And here are the nine:
- Hartford, Connecticut
- Asheville, North Carolina
- Pittsfield, Massachusetts
- Wilmington, North Carolina
- Stamford, Connecticut
- Manchester, New Hampshire
- Bremerton, Washington
- New London, Connecticut
- Salisbury, Maryland
So what does this all mean?
If you’re looking to buy a home for the first time, and you’re in a hot market, you need a strong Realtor who knows how to go to bat for you. If you’re in a cooler market, you might still have difficulties finding homes to buy, but the prices will be great.
If you’re looking to sell, and you’re not in a cold area, be prepared for bidding wars. Get your home looking move-in-ready, and you could possibly get far more then your asking price. A strong Realtor will help you pick out the best offers.
Are you thinking of buying or selling this year?