Looking Forward to 2013:
It's amazing how time flies! Seems like yesterday we were just entering the new millennium and then entering 2012, and here we are--just 18 days from the New Year--2013! Hope you all had a truly great year and more for the coming year!
Trends for real estate in 2013 are, at this point, optimistic--even in the face of the looming possible 'fiscal cliff'. As analyzed in The Fiscal Times ( www.thefiscaltimes.com ), a number of real estate economists were interviewed and came up with a list of ten trends for the coming year--the general indication that things are looking up.
A sampling shows:
HOME PRICES CLIMB HIGHER: New-home construction is far short of its pre-recession pace, failing to keep up with population growth or the rebounding housing market and thereby helping to push home prices higher. The National Association of Realtors forecasts average home prices to rise 5 percent next year.
MORE HOUSEHOLDS, RISING RENTS: Millions of young people who rode out the recession by moving back home with their parents are now getting jobs and looking for their own apartments. The pent-up demand for rentals is twice as big in percentage terms as the country has ever seen. Average rents have been rising in many metro areas by 7 to 9 percent a year, and a recent Zillow analysis found that buying beats renting in 59 percent of markets after three years or less.
EASIER CREDIT STANDARDS: Would-be borrowers now need a FICO credit score in the 760s to get a mortgage, much higher even than in the years before the easy-credit housing boom began, according to the Federal Housing Finance Agency. That should start changing next year — qualifying scores will drop as more qualified buyers come into the market and lenders compete to offer them loans, according to Luis Vergara of Mission Capital Advisers in New York City.
Other trends include fewer opportunities to buy bargain-priced foreclosures, a rising number of short sales, more first-time buyers, higher construction costs, new jobs for property managers, higher mortgage rates, and consolidation in the home-building industry.
For a closer look at the list of real estate trends in 2013, check out the report in The Fiscal Times.
Beyond the trends for 2013, interest rates continue to be worthy of note. This week, the Fed, in the person of Chairman Bernanke, stated that they plan to keep long term rates low at least through 2014, even if the unemployment rate continues to fall. This is to insure that once it reaches "acceptable" levels, it doesn't immediately start to rise due to the effects of higher rates on the economy. The Fed's comments in this regard were that it may take at least 3 years to reach these acceptable levels.
As I've said many times previously, this interest rate level is great for both buyers and sellers. Right now there are an army of buyers, low rate financing in hand, looking for homes to buy and a very low inventory to choose from. Put your home out there and you might very well receive a great price for it!
If you are one of these buyers, I don't need to tell you that with rates like these, it's a great time to be looking. Every reduction in rates can save you hundreds of dollars every month in your mortgage payments. That translates into either a lower payment than you might previously have expected, or the ability to buy a more substantial home than you had thought possible at former high rates. Either way, you win!
Questions? Call us for advice on buying or selling. If you wish, we would be happy to visit and give you a free valuation of your home's worth in the current market. Call: Peter: (415) 279-6466 or Jane: (415) 531-4091.