Home buyers can be confident they wont be buying at the bottom in 2013. The national housing market hit bottom in October 2011, and has risen for 13 consecutive months. Zillow.com calls for a 2.5% increase this year nation wide, and close to 12% in the Sacramento area. What does this all mean for buyers? Many may finally return to the market with less fear of selling at the bottom, while still taking advantage of the record low mortgage rates.
This affordability has made buying cheaper than renting in 60% of metro areas, according to Zillow. Certain areas, mainly the West and Southwest, are largely seller’s markets, whereas the Northeast and Midwest remain buyer’s markets. Finally, real estate has returned to be a local phenomenon, rather than Recession-era markets determined by widespread fear, lack of credit, and foreclosures. Having a sufficient grasp of the current local market will be vital in comparison to the past few years.
The rising prices have alleviated millions of underwater homeowners. Less than 30% of U.S. homeowners are underwater for the first time since the crash. This will allow a rush of new sellers to enter the market, loosening the grip of low inventories and fierce competition for almost every listing. Therefore, prices should begin to slow their accent.
Houses remain well below their levels before the crash. Median home prices are down over 19% from May 2007, according to Zillow. As well, mortgage rates remain at record lows, and should until at least 2015. Combined, these forces have American homeowners spending about 13% on mortgage payments, down from a historical average of 20%. Thus, buying dollars will go much farther still in 2013.