Current State of the Housing Market
The law of supply and demand says when there is an increase in demand, inventory decreases, and prices increase.
Will the Bubble Burst again?
Housing Inventory Continues to Decline…
The housing market today is not what it was yesterday! 12-months ago, terms such as it’s a buyer’s market, housing inventory continues to rise, and now more then ever is your time to buy a new home. Unfortunately, this is not the case today. There are a plethora of reasons why homes for sale have decreased significantly.
See below for a short list of factors…
Why there is so little housing inventory available:
1) Mortgages are still underwater in many areas (negative equity). Homeowners do not have enough equity to sell their homes and hold onto them hoping the prices in their markets will increase (which decreases inventory).
2) Mortgages are still delinquent in many areas (foreclosure backlog, which decreases inventory).
3) Loan rates have risen.
4) The amount of distressed homes to buy (for a bargain) has decreased. Two reasons, the banks have not taken back homes that are delinquent (processing backlog), and new opportunities have been given to homeowners in distressed properties to stay in their homes.
What this all Means?
If you are in the market for a new home, study the area first before you decide the buy.
Getting above water
Most of the millions of people still upside down on their mortgages are waiting – and weighing what to do.
In additional to simply paying off your loan over time, the surest way to get out of negative equity is to wait for a home’s value to appreciate enough to bring it into positive equity. And in markets where home values continue to rise and for homeowners who are in no rush to move, waiting for negative equity to turn positive may be the solution. But it could be a long wait for the more than 15 percent of underwater homeowners who owe at least twice what their homes are worth.