2012 is Almost Gone, 2013 Not Here Yet: Commentary of What’s Happening
Context for the Numbers. Our State Economists Breaks Down the Numbers and Reports On What’s Happening and What May Happen in 2013
Yes, average values have gained +15% from last year alone and yes, in some places we are back to 2007 prices. But why?
+20 Percent Yes, But Look Deeper
Starting in February, something happened. Was it herd mentality? Either way people flocked to the market as we know. Aggregate prices are up 20% over 2011 prices. Looking deeper though we can see that 1/2 of this gain comes from price appreciation but also because there was a change in the types of property being sold: there are fewer foreclosed homes being sold as that inventory continues to be cleared.
More people want to be in market than can be. Will they get a chance?
Low mortgage rates from the Fed are expected to last until 2014/2015 but if rates go up sooner that means economy is better than expected.
If you look at the long term average growth trend with oscillations to account for bubbles and downturns, median prices are still nevertheless positive. The slope is upwards and there is an affordability gap in buyers’ favor. But there are more buyers than supply and, what’s worse, is that lenders have been too risk-averse. Consider that the average credit score for Freddie/Fannie has moved up to 763! Underwriting criteria are irrational
With many folks are being distracted by the holidays they shelving their home searches until 2013. But if you stay alert there are opportunities to be had. So, stay vigilant!