I get asked this question more than almost any other. Everyone wants to know what's going on with the housing market. Unless you were living under a rock, you know that since 2007, the housing market hasn't been that great. For those who are a bit sketchy with the details...this is mainly because loans were created that shouldn't have been. Banks were providing buyers with financing for homes that they simply could not afford. The prices of homes nationwide had increased so much that the lenders just assumed prices would continue to increase. They were loaning money left and right based on this assumption and eventually it backfired. Buyers could't make the payments on their homes, which eventually led to mass foreclosure. In a number of markets 30% of the active listings on the market were foreclosures!
So what about today? Well, as you can imagine, lenders were forced to become stricter with their lending practices. More regulations were put in place and now if you make $7 an hour the bank won't tell you that you can afford a $400,000 mortgage. Imagine that.
Interest rates have also decreased. This is a good thing because it means more people can afford to buy. If you are looking to sell your home it's a great time, because the pool of buyers has increased everywhere. Also, the regulations have come down a bit, while lenders are not being ridiculous, they have found a good middle ground and are lending money again, which is good.
We are also seeing a slight rise in home prices. The spike in prices we saw between 2003-2006 is not going to happen, (which is good because that much of a spike, in such a short period of time was not a good thing!) but things have stopped declining, have leveled off, and have started to SLIGHTLY increase. This is great!
There are still a number of foreclosures out there and there are more to come. Many of the bad loans written back in the early to mid 2000's were 5-10 year interest only loans. Those 5-10 years are ending and the buyer's payment is about to change dramatically. When that happens we will see a spike in foreclosures again because the homeowners can no longer make the increased payment.
So to summarize...as a whole it is a great time to sell because for those who have good credit, it is a good time to buy. Rates are down; meaning you can now afford the home you couldn't afford a few years ago. In addition, if you are an investor, or are looking for a good deal...there are still a number of foreclosures on the market...and more to come in the next year or so.
We've seen the worst and things are looking better. As a nation we've hopefully learned from our mistakes and can move forward.
And remember...if you would like to buy, sell, or invest...give me a call!