By: Jesse Godzala
I love talking about new trends in real estate. What’s on the horizon, what’s hot right now, what’s going to be hot soon, these are things I read about, blog about, discuss, agonize over, argue with and reflect on. I’m sure I drive people nuts discussing these things (especially those individuals not in the business), but I seem to have a one-track mind when it comes to real estate. Oftentimes, I don’t want to get off the computer, hang up the phone or leave a house to eat – now that’s obsession! So, what’s trending now in the world of real estate? Isn’t it nice I’m not there actually talking to you? You can just read this and move on without me belaboring any number of points.
Inventory is low, According to Lawrence Yun, NAR chief economist “Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels.” Hyper-locally the supply of homes is down to roughly five months, well below the nearly 12 month supply we saw between 2008-2011. This is great news for sellers because they have decreased competition and with the demand still up, sellers can expect increase sale(s) prices and quicker transactions.
Interest rates on home loans remain low. “Low mortgage rates are a welcome sign for those in the market to buy a home this spring season and will help to support homebuyer affordability,” says Len Kiefer, deputy chief economist at Freddie Mac. With the recent jobs report not being quite as good as economists thought, expect the next rate increase to be towards the end of this year as opposed to the early summer projection that was forecasted previously.
We are continuing to see foreclosures and short sales make up less and less of the market share as each year goes by. “Given that August 2006 was the peak of the housing bubble, this eight-and-a-half year low in foreclosure activity is a significant milestone and a sign that nationwide foreclosure activity is on track to return to historic norms this year,” says Daren Blomquist, vice president at RealtyTrac. Corelogic’s National Foreclosure Review shows foreclosures nationwide down over 20% just from last year. This is more great info for sellers! Gone are the days when prospective sellers have to contend with the onslaught of bank and REO sales weighing down their ability to sell in the marketplace.
Buying these days is definitely cheaper than renting. Listen up all you rental tenants out there. “In the past five years, a typical rent rose 15 percent while the income of renters grew by only 11 percent,” says Lawrence Yun, NAR chief economist. A National Association of Realtor’s recent study suggested that renters spend double their household income on their home/apartment payment than their peers who purchased.
Overall, it’s a great time to sell and buy! Inventory and rates are low, unemployment is low, the DOW is up, and mortgages are slightly easier to obtain, “Freddie and Fannie have also said they will start backing 3% down loans. Borrowers can currently get 3.5% down loans from the FHA, although they require borrowers to pay mortgage insurance premiums for the life of their loans,” says CNN Money. In our area we are still seeing buyers take advantage of rural development loans as well which according to the USDA is part of a program designed to, “assist approved lenders in providing low- and moderate-income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas.”
So there you go! Hopefully this provides a little snapshot into the current state of real estate locally, regionally and nationally. Of course, if you want more info, feel free to contact me at your own risk.
This post was written by Jesse Godzala of the Godzala/Brenny Edina Realty Team. Jesse is a 5-star realtor on Zillow.com and a Chairman’s Circle Award Winner at Edina Realty. For more information regarding the current housing market, contact Jesse at firstname.lastname@example.org or by calling (320) 309-7335.