Real Estate Market
Each month, housing reports are released which indicate the current trend of the housing market. These reports are very important for the property appraiser who needs to be knowledgeable about the current mood of the real estate market. Appraisers such as Abbe Edelman find this information useful when determining house value. Part of determining house value is a comparative look at similar properties in the region. To give a fair value they must be aware of the trends that occur.
Housing Market Update December 2012
Overall, the nation’s housing market is making a slow recovery but from the current signs real estate is not yet in full recovery mode. One of the factors influencing this slow movement is that credit standards are remaining tight. There are literally millions of homeowners which are stuck in one stage or another of default or foreclosure. Many other homeowners owe more than what the home is worth according to the value the assigned by the property appraiser. However, the economy appears to be growing stronger and with this economic growth the housing market is expected to continue a slow growth as well. Until there is a full recovery real estate professionals will hold their breath and wait knowing that if the economy begins to weaken again, there could be a relapse in the housing market.
State of the Federal Housing Administration
The FHA has announced that they are experiencing a large number of delinquencies. Due to the large number of delinquent loans, for the first time in its 78 year existence it may have to completely exhaust its reserve funds. If this happens, the FHA would have to rely on funds provided by taxpayers. This type of sizeable government bailout could end up weakening the economy. We will not know if this is necessary for the housing market until February 2013.
Is Now the Time to Buy?
Right now can be the time to purchase a home because of the all time low mortgage interest rates. For those who have good credit ratings and have been waiting to purchase a home it can be the perfect time. However, it is important to realize that the current standards for underwriting mortgages are very stringent due to the large number of homes in default or foreclosure. Lenders are tightening up their requirements and being very picky whom they are loaning money to. For those with good credit scores and the present home values it can be the best time to obtain financing. These all time interest rates will likely be temporary and could fluctuate depending on what the economy does in the next few weeks.
House Sales
There was an increase of about 12 percent in housing sales for November 2012; with some areas reporting as much as a 22 percent increase in sales and others as small as 8 percent growth. This reflected a large amount of growth when it is compared to this time last year. The economy slowly recovering is one influencing factor but an increase in jobs and household income have attributed to this growth as well. Currently, home values remain at affordable levels for consumers and this is helping the real estate market’s rebound. Low credit cost and the FHA funding for low income borrowers are all encouraging the recovery.
Future Concerns
The biggest block to a stronger recovery of the housing market remains a severe shortage of inventory. Even with the “fiscal cliff” with its possible tax increases as well as spending cuts by Congress, it seems that the housing market remains unaffected. While there is not much that can be done about low inventories, there is an indication that early next year the housing market’s recovery will continue.
