If you watch any kind of news, whether it is local or national, you have probably seen stories that the housing market is improving and that housing sales are increasing, sales of both new and used homes. While housing sales numbers have had the appearance of improvement over some of the historical lows reached at different times this year, close examination of some important facts might reveal to you that light at the end of tunnel (a catch phrase used by some economists) is in reality a lightening bug and not a 200 watt floodlight that they seem to be describing. In some markets there is a glimmer of hope, depending on the area of the U.S. you live in. Residential areas that had little speculative building or track builders have shown improvement in both sales and prices. This is just basic economics 101 folks. There was no tremendous oversupply of housing available in these areas or lenders who were making loans to people who only had to prove that they were breathing to qualify.
On a national level the lending arena has changed significantly, making it harder for builders to get constructions loans and individuals to purchase homes. This has cut down on the supply of homes that are available making areas that were not overbuilt or oversupplied show sales improvement and price improvement or stabilization. Areas like Atlanta, Georgia and its surrounding suburbs (where I live) at the beginning of the housing and economic downturn had in some cases over a 5 year supply of new housing available, not including foreclosed property. Add to that supply foreclosures and resales. Trying to cut down on the glut of homes on the market and stop the freefall of housing prices, new programs by Fannie Mae and other major lending institutions have initiated moratoriums on foreclosures. These programs have had some effect on stabilizing housing prices in both over supplied and a normal supply housing markets. Unfortunately, foreclosure moratoriums, and special incentives for homebuyers will eventually come to an end.
If you are looking for a home to purchase, whether this is your first time buying or you are one of the fortunate ones that have been able to sell your home and “trade up”, this a great time. For the first time in many years home prices are at a more realistic level. There are wonderful affordable bargains in foreclosures and short sales, especially in the hardest hit areas such as Atlanta (my neck of the woods!). Some need some “elbow grease” and others are move in ready. Get preapproved for the price point where you want to be first so you don’t start looking way above your budget. Don’t overbuy just because the loan office says you can afford it (sorry if I sound like your mother). Make sure you have some money in savings for emergencies. Check out the schools and neighborhood of the house you pick and also how long the commute is to your job, grocery stores, doctors, etc. Please email me with your stories of how your house hunt is going or not going!