According to a recent Trulia’s American Dream survey, “consumer optimism is rebounding – faster than the housing market itself is. Prospective homebuyers are looking at bigger homes, thinking more seriously and optimistically hoping for higher home prices in both the short-term and long-term.” And, 80% of current renters say that they plan to buy a home someday.
Corelogic noted that nationally, home prices have been increasing for eight months in a row and showed the largest increase in October 2012, the largest increase since June 2006.
Here in California, 57% of homes for sale have attracted multiple offers, sometimes even bidding wars. The question on everyone’s mind is… is this pattern going to continue on into 2013. Most of the experts cautiously say that if the economy doesn’t experience the falling off of the fiscal cliff, or any other unforeseen financial catastrophe, 2013 promises to be a good year for real estate.
The top 5 real estate predictions for 2013
1. Rising home prices. The fact that new-home construction is at a slow pace – pushes home prices up. Since the housing crash, construction of new-homes has been at 500,000 or fewer for the last six years. This has created a shortage of available homes. NAR reports that the inventory of homes for sale this year is 22% below where it was a year ago… the lowest inventory since February 2006.
2. Fewer foreclosure bargains. Foreclosures have dropped due to the fact that the equity position of 1000’s or borrowers has improved due to rising home prices.
3. More short sales. With the number of foreclosure sales falling, the number of short sales should rise. On November 1, the FHFA issued new rules on short sales for Fannie Mae and Freddie Mac which resulted in less hardship documentation required, and borrowers don’t necessarily have to pay the difference between what they owe on the mortgage and the final sales price.
4. Easier credit standards. Currently would-be borrowers now need a FICO credit score in the 760s to get a mortgage, much higher even than the years before the easy-credit housing boom began. The experts are predicting that qualifying scores will start dropping as more qualified buyers come into the market and lenders compete to offer them loans.
5. Property managers in demand. Recently, investors have been snapping up distressed properties to rent, so it’s a great time to be a property manager. Many of those investors are now using professional property management companies to rent and maintain their purchases, which has created huge demand for their services.
6. Easier credit standards. Currently would-be borrowers need a FICO credit score in the 760s to get a mortgage, much higher even than the years before the easy-credit housing boom began. The experts are predicting that qualifying scores will start dropping as more qualified buyers come into the market and lenders compete to offer them loans.
If you are thinking of buying a home in 2013, contact a Century 21 M&M Realtor in Northern California for a free consultation and market analysis, or call (800) 696-5305.