by +Sarah Marrinan - Keller Williams Premier Realty
Know this:
1) 2010 is recognized as the "bottom of the market" even though some areas continued to fall in 2011 and even 2012. The recovery is patchy. Know your LOCAL market.2) Lenders are cautious. Lending standard are overly strict and underwriting standards are tight making it hard for those with "less than perfect credit" to obtain a mortgage. Plus, banks own land that was foreclosed on and they are not eager to sell it for a loss. (The same can often be said for foreclosed homes.)
3) Mortgage rates are at historic lows. Most loans are currently backed by a government housing agency. The feds are keep rates low and this won't go on forever.
4) Real Estate flippers and investors are "at risk" if mortgage rates jump. The higher the interest rates, the less people can afford to pay for housing.
5) Foreign buyers. Say what? Yes, foreign investors taking interest in U.S real estate shows faith in our market recovery but this is also helping to drive prices up for Americans.
What does this mean if you are thinking about buying or selling?
Buyers: You can afford more now while prices are still relatively low and interest rates are unbelievably low.
Sellers: If your market is recovering, you have better negotiating power AND the likely hood of your home selling is high!
Caution on both sides of the deal: Appraisals. This is not just limiting in price but also condition. (See #2.)
Want to talk about it? Call me!
sources:
http://www.usnews.com/news/blogs/rick-newman/2013/05/03/5-reasons-the-housing-recovery-remains-wobbly
http://realtormag.realtor.org/daily-news/2012/09/17/analysis-blames-slow-recovery-tight-credit-market
disclaimer: I am not a financial consultant, tax attorney, etc. Please seek those professional services if you need them.
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