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Thinking of Buying a New Home? Why Wait? Residential Real Estate Is Ready to Recover!

By Alan Gross

Mortgage and Lending with PrimeLending, A PlainsCapital Company, Equal Housing Lender NMLS #217388

April 03, 2012 01:00 AM

Thinking of Buying a New Home? Why Wait? Residential Real Estate Is Ready to Recover!

The news in residential real estate hasn't been good for the past few years but things are starting to change.

If you've been sitting on the sidelines thinking about buying a new home now may be the time to jump into the game.

A recent article on CNBC.com was titled D.C. Housing Market One of the Strongest. The article states "Kevin McManus wanted to sell his North Arlington, Va., home back in January, but his real estate agent suggested he wait until spring. McManus listed the home on March 13th, and it sold seven days later — right on the vernal equinox.

"The D.C. Metro-area housing market is slowly improving with rising sales activity and stabilizing prices," says Jonathan Miller, a real estate appraiser and consultant. "The sharp drop in inventory over the last six months and rise in contracts has helped keep prices firm."

The median price of an area home was up 6 percent in February from a year ago to $317,900, according to Miller, who puts out a monthly report. That's about twice the price of the national median existing home and is the biggest year-over-year gain for the corresponding period in 2007-08.

Pending home sales were up in February from sales in February 2011 while the active inventory has decreased during the same period.

"We have seen a steady increase of consumers testing the waters of the housing market, thanks to increases in median sale price, quickly selling homes and historically low interest rates," says Jeffrey S. Detwiler, president and CEO of Long and Foster. "These dynamics continue to drive positive momentum in the residential real estate market throughout Washington, D.C."

The Street.com is also seeing improvement in the residential real estate market. In a article titled Residential Real Estate Is Ready to Recover "The housing market's shadow inventory of unsold homes is starting to clear, certain areas of the country are experiencing signs of more robust activity, and, despite low levels of new-home production (based on historical data), homebuilders are even regaining pricing power in several geographic regions."

The article went on to say "Stated simply, the U.S. residential real estate market is about to launch a broad and sustainable multiyear recovery. And, from my perch, the share price strength in housing-related equities is telling the real story of an improving and self-sustaining home market that could continue through the balance of this decade."

Here are 7 reasons stated in the article to expect a durable recovery (in demand, activity/transactions and in prices) in the U.S. housing market:

Housing affordability is at a multi-decade high.
Reflecting normal U.S. demographic trends (household formations of 1 million-plus per year) and a low level of 2008-2012 new-home production, there is plenty of pent-up demand ready to be unleashed.
As rental prices have risen and as home prices have fallen, the economics of home ownership has improved.
We have seen a decisive improvement in the jobs market.
Mortgage rates are at historic lows.
Housing surveys have turned positive.
Confidence is improving.

The Washington DC area was ranked in the Top Ten U.S. Cities Where Homes Sell the Fastest.
The "Perfect Storm" in real estate with a combination of low home prices and low interest rates in slowly coming to and end. The cost to purchase and home is going to rise.

If you've been sitting on the fence, isn't it time to jump off and get into the game?

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Alan Gross