As a Realtor, I am amazed at how quickly the market can change. Spring 2012 has brought back the days of multiple offers leading to Realtors calling for the “highest and best” from our customers. For the first couple of weeks of this new market, we all held our breath thinking that we must be imagining this trend. But now, well into the season, we have accepted the reality. If the property is in good conditions, with a good location, and priced at fair market value, you should not try to low ball it. Chances are that someone else is looking at it and willing to pay full price or very close to it. Should I dare to say, they might even offer more than the list price. Investors buying properties for rentals are competing with home owners. Rents are rising. A property that will sell for $60,000 can rent for $1,000 or more per month. At today’s interest rates, you do the math. I even heard a mortgage officer say that we are no longer in a declining market. We have been thinking it but everyone was scared to say it.
Call Traditions Realty for an update of current market trends in your area. With a full service agency offering property management, we can educate you on the rise in rental prices and availability of investment property. You need to know what renters want and what they will pay preium prices to lease. Just as important, you need to know what they don’t want and what areas tend to have longer vacancy periods. Traditions Realty can put you in touch with an agent with a vested interest in your success. Read more below.
Three housing trends emerging this spring
WASHINGTON – April 30, 2012 – What can homebuyers expect to face this selling season? An improving housing market has made it a different picture in many areas compared to recent years, housing experts say. Bankrate.com notes the following trends:
1. Fierce competition.
Housing affordability is at a record high due to falling home values and mortgage rates near record lows. More buyers are jumping off the sidelines. At the same time, investors are snapping up bargain prices, often in all-cash deals, and competing with traditional homebuyers. Add in a sinking inventory of homes for sale, and the competition is getting fiercer.
“Rents are going up, and as long as there are properties at the level where investors can get positive cash flow, they will continue to invest,” says Jed Smith, managing director of quantitative research for the National Association of Realtors®. Smith adds that first-time homebuyers, in particular, may find increased competition from investors in trying to snag some of the best deals on the market.
2. More renters show desire to become homeowners.
Recent surveys show that buying a home now is more affordable than renting. As such, more renters are finding homeownership more enticing.
The signs are already starting to show: About 59.5 percent of tenants recently surveyed by Kingsley Associates say they intend to renew their leases this year, which is the lowest rate since early 2009.
3. Mortgages may be a little pricier.
Fannie Mae, Freddie Mac and the Federal Housing Administration recently raised their loan fees, which means homebuyers can expect to pay a little more for their mortgage this spring.
“Those who don’t have credit scores in the high 600s to low 700s may be forced to go the FHA route,” says Ed Conarchy, a mortgage planner at Cherry Creek Mortgage in Gurnee, Ill. “And they will be stuck with the higher fees.”
Buyers with smaller downpayments can expect to pay more for FHA mortgage insurance premiums, which have risen to 1.75 percent of the loan total. Bankrate.com cites an example illustrating the higher fees: A borrower who takes out a $200,000 FHA loan will likely have to pay about $3,500 for mortgage insurance upfront. Prior to the increase taking effect, borrowers would pay about $2,000 for that same loan amount.
Borrowers with higher mortgages can expect higher fees too. The FHA announced that in June it would increase its annual insurance for mortgages more than $625,500. “A borrower who lives in a high-cost area and takes out the maximum $729,750 (which is the FHA limit for high-cost areas) will pay $912 each month in mortgage insurance alone,” Bankrate.com reports.
Source: “5 Mortgage and Housing Trends in Spring 2012,” Bankrate.com (April 21, 2012)
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