The Media has finally caught up with what I and many other Real estate experts have noted. Prices are rising. Supply and Demand control prices of commodities, and homes for sale (real estate) is a commodity. Most people tend to think of a home for sale as a product (i.e. a computer, apple, car) but really a house is an assesst that has a value that can change based on market forces. In the past few months I have seen more multiple offer situations on well priced homes, and bidding wars that are reminicent of the heady boom years of 2005-2007. Recently I made an offer for a bank owned home for 10% over the asking price, CASH, and our offer was beaten by an even HIGHER offer! That same week a home sold for 12% over the list price. Buyers definitely have more confidence in this market as many are learing quickly that you have to act fast and come in with a good offer if you expect to get the home you want
- For the past few months interest rates have been dropping. This past week I helped a family lock into a 30 year fixed mortgage for 3.375%, with no points! That is the lowest I have ever seen for a conventional 30 year fixed mortgage. This in effect increase the buying power of the home buyer making a more expensive home more affordable.
- Home inventory here in Florida, and specifically in Manatee and Sarasota counties has also dropped to the lowest levels in the past 8 years. In 2007 there were over 12,00 homes condos and vacant land for sale, today there is little over 3,000 total. Considering that there is about 400-450 units being sold each month, we are at about a 6-7 month inventory assuming no new homes come on the market.
I believe that the inventory will be increasing in the coming year as there is a very large shadow inventory of short sales, foreclosures, and bank owned homes that are being held off the market. Perhaps deliberately in an attempt to help raise prices, or simply because the banks, and court systems can not handle the volume of foreclosure properties. The big question is whether the distressed inventory can be absorbed as it come on at the same rate, or will it start to stack up and create more inventory than can be sold?
With 47% of the homes underwater in the Sarasota and Manatee real estate markets any increase in value has to make homeowners feel more optimistic that their homes will soon be increasing in value. Rising values will also hopefully help keep those homeowners that were close to having to short sell perhaps able to now sell "normally". This could have a huge benefit in improving home owners credit scores, and confidence with the market.
The major impact that will be felt by all the news reporting home value's rising is increased demand from buyers. Anyone that has been on the fence about whether now is the right time to buy should be kicked into action by the latest real estate news as reported in the Wall Street Journal this morning.
Freddie Mac reporting records record 3 BILLION DOLLAR PROFIT second quarter profits.
Fannie Mae reported a 2.7 BILLION DOLLAR PROFIT.
Corelogic Inc. Reported yesterday that PRICES ROSE by 2.5% in June from a year ago, and that prices are up by 6% from the prior quarter. (That's a massive increase from their projected 1% decrease they were expecting)
71 of the nation's top 100 metropolitan areas saw prices rise on year over year basis in may, compared with only 19 markets in December.