If you listen to most real estate agents, no matter what the market conditions are, they always say its a good time to buy a home. Even in 2007, right when the housing bubble was about to burst, they were still crowing it was a good time to buy. One company head and founder even had predicted we hit the market bottom in 2008! Often the National Association of REALTORS® (NAR) has their economist spin that everything is great in real estate or will admit its down only when its obvious to everyone else with half a brain.
As a former appraiser, I was in the trenches when the market was booming and knew it was unsustainable. It was ridiculous to see homes appreciate tens of thousands of dollars in a few months time without even improvements being made to the home. I remember going back to properties 2-3 times to reappraise their condo or home because the owner was cashing out their equity on a refinance. Appraisers were under pressure to bring in the increased values or risk not receiving work from that lender. The price of homes was quickly outpacing increases in income.
Now that I am on the sales side, I am seeing buyers faced with less homes to choose from, multiple bids on correctly priced homes, and a decrease on the days on the market.
No area was invincible to the real estate downturn. Some areas were hit much harder like Arizona, Florida, and Nevada. New Jersey was plagued with a high inventory of distressed properties due to the Robo Signing controversy and the courts freezing all foreclosures.
Now with significant increases in the number of sales and reduced housing inventory in 2012, there are finally solid signs of a real estate market recovery in Bergen County, New Jersey and nationally. Its not just agents, real estate company presidents, and NAR who are predicting an improving real estate market in 2013.
J.P. Morgan Chase is predicting a 3.4 to a 9.7% increase in home prices in 2013. Standard & Poor’s, which rates private-issue mortgage bonds said it expects a 5% increase.
In Zillow’s December Home Price Expectations Survey, which is based on responses from 105 economist and industry experts, they predicted a 3.1% increase in home prices.
The Wall Street Journal says home prices are on track to have their first yearly gain since 2006.
CNN Money reports that new home sales recently recorded their strongest pace in more than 2 years.
Foreclosures hit a 5 year low nationally and the unemployment rate fell to its lowest level in 8 years. Couple this will near record low mortgage interest rates and there are numerous signs of a turnaround in real estate in 2013.
Now don’t get too giddy. It still can be tough for buyers to qualify for a mortgage, not have a property be undervalued by the appraiser, we still have a plentiful supply of short sales & foreclosures to weed through, and the economy isn’t exactly booming presently.
I say its definitely okay to have some guarded optimism for the real estate market in 2013 and beyond. Yes, I am going to say the hack real estate agent line that “it’s a good time to buy a home!”