New year, new market! Let's take a look at what experts are predicting for the new year and how that will affect your future. There have been consistent and steady gains throughout 2012 and experts are expecting that momentum to continue into the new year. The Wall Street Journal touched upon a few points they believe to be important issues in the Real Estate industry for 2013. The first issue to discuss is market inventory. As I had mentioned in a few of my previous posts in 2012, the inventory in most markets has been fairly low. Buyer demand, however, has been increasing and growing very strong as of late. In order to meet the increasing demand, home builders are increasing their production and with the increase in home prices, home owners are expected to feel more comfortable listing their homes. More new homes along with more favorable market conditions in the eyes of the sellers will hopefully mean a greater inventory of houses on the market.
Another aspect to look at in the Real Estate market is the effect of the rising home prices on buyer and sellers. As I mentioned above, the rising home prices will help the sellers feel more confident and open to the idea of selling their home because one of the main reasons that home owners were holding off on selling was avoiding a huge loss. What does this mean for the buyer? Well, consistently increasing home prices will lead to a greater urgency for home ownership for a few reasons. Rising home prices results in higher rent prices which makes renting not as ideal as it was the past few years. Mortgage rates are still at record lows which creates a great opportunity for home ownership. If there were potential buyers awaiting the market to bottom out before they decided to buy...well...it did bottom out and the consistent rising of prices shows a strong recovery. All of these conditions make it more urgent for buyers to buy sooner rather than later.
Another issue that has been haunting the Real Estate recovery has been the issue with credit. Although the mortgage rates are very low, obtaining a mortgage has not been a walk in the park, and that does not seem to be getting any better in the near future. Many issues with regulations and lending practices have to be thought over and re-mediated in order to create a better environment for lending. Lastly, the two major issues related to the Real Estate recovery are unemployment and statue of the Economy. If unemployment decreases and the economy can get going again, we will see most of the issues hindering the recovery disappear. However, if the economy takes a down turn and unemployment increases then the Real Estate recovery will likely slow or even stop. I will keep you updated on these important issues as the year progresses. So what does 2013 have in store for Real Estate? Without my crystal ball I can't really answer that question yet, but I can tell you two things that I see for 2013... Promise and Potential!
