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Author: Daniel Torelli, News

Housing market in 2013

With talk of fiscal cliffs, debt ceilings, and unemployment rates lurking around every corner, you may be inclined to think that 2013’s housing market is going to be chock full of doom and gloom. But not so fast! Even though the New Year is still young, we’ve already got 5 reasons to smile about 2013’s housing market:

1.  The investors are back
Say what you want about flippers, but they wouldn’t put their money into the housing market if they didn’t think they could get something out of it. Places like Phoenix, Seattle, and Miami are living proof that all-cash buyers really do exist in today’s market – which is reason for plenty of sellers to smile! Even if the first-time homebuyers don’t show up in droves, the investors should be enough to keep things moving in the right direction until the so-called “normal” buyers come around.

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2.  Prices are going up – even if they’re doing so slowly
The National Association of Realtors thinks America could see its home prices rise 5% before 2013 comes to a close. That’s a pretty optimistic prediction, though. Generally, most experts are leaning towards a 3% increase. Still, though, considering what home prices have been doing for the past few years, ANY increase is a big deal! In fact, it’s probably a good thing that prices are going up slowly. If they were ballooning out of control (like they did in the mid-2000’s), we could wind up with another problem on our hands. Take it from the tortoise – slow and steady wins the race!

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3.  More houses are filling up
As 2012 came to a close, the nation’s vacancy rate for owned homes sat at 1.9%. During the height of the recession, it was 2.9%. During a healthy economy, the rate is 1.5%, so we still have a ways to go, but we’re headed in the right direction.

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4.  There are fewer foreclosures
For years, foreclosures were practically the sun of the housing market solar system. In fact, even as recently as 2012, foreclosures made up nearly 25% of the nation’s home sales! Luckily, the tide is beginning to turn. Fewer homes are currently going through the foreclosure process, which means fewer of them are going to wind up on the market at bare-bottom rates. That means, when you eventually go to sell your home, you won’t have to compete with a home that’s priced way below yours. Plus, you won’t have to worry about a bunch of foreclosures sitting on your street (after all, they’re usually called “distressed” for a reason!).

5.  People aren’t over-borrowing
The main reason we’re in this mess in the first place is because people were getting loans they never should have gotten in the first place. Sure, the banks shouldn’t have made it so easy to get money, but people should have known better than to take on debt that they couldn’t handle. Now, it seems like everyone’s being a little more careful. The banks are making it tougher to qualify for loans, and homeowners-to-be aren’t going overboard with their debt. They’re making do with less – be it smaller homes or better bargain-hunting.

When you look at it this way – and look at some of the momentum the housing market gained at the end of 2012 – it’s entirely possible that 2013’s housing market could actually ADD something to the U.S. economy, instead of taking away from it, like it has done for so long!