Ok, so the news doesn’t look so good for the housing market right now what with IndyMac being seized by the government and mortgage lenders Freddie Mac and Fannie Mae’s stock plummeting. But take heart, because real estate always seems to rebound, and in fact, there are areas of the nation that are beginning to see a brighter future.
First you have to keep in mind that just because the housing market in one area is bad, that doesn’t mean it is bad all over. That’s because real estate is a local game. In fact median prices for existing single-family homes in a third of the country’s metro areas are actually higher than they were a year ago, according to the National Association of Realtors. Of course you’ll have to do your research, especially when looking for reputable mortgage lenders and real estate appraisers. Be very careful though, because one of the shady practices of some mortgage lenders is coercing real estate appraisers to turn in a report that shows a higher value for a home than the market in those areas really reflects.
You also want to keep in mind that even when the housing market was beginning its bubble, different areas of the nation were booming sooner than others. For example; real estate in Las Vegas and San Diego were two of the first markets to shoot up. That being said, different cities in the country will start rebounding faster than others as well. The point I’m trying to make is this, don’t lose hope just because the housing market in your area still stinks. Again, it may be even more important than ever to find an honest mortgage lender even before you begin looking for your home. Try asking around; word of mouth is the best referral source you’ll find.
With prices of homes starting to fall, you may be thinking this is a good time to get into the housing market. But before you do, ask yourself a few key questions, in order to gage whether or not real estate is rebounding in your area.
First of all, is there a reduction in the supply of homes combined with a spike in sales in your area? If so, this is a good sign that your location is on the way back up the real estate ladder. Try and research the amount of mortgage loan applications mortgage lenders in your area are getting. Again, if it is a lot, or if the number is rising, that’s a good sign. You may want to enlist the aid of an experienced real estate agent for that one, because often times, it can be difficult information to get unless you work in the housing market industry.
Even though falling home prices are a good thing for buyers, knowing when the fall begins to slow down is even better. For information on the sale prices of homes in the housing market in your area you can find quarterly price data for about 150 major metro areas at the Web site of the National Association of Realtors. For monthly figures, ask your agent or local real estate association. Some agents will even provide stats for homes in particular price ranges and zip codes. Another good option is to hire a real estate appraiser. They do research on the sale of real estate in your area, and can tell you what the going rate is. Keep in mind that you’ll want to track these numbers for at least three months in order to feel confident that the housing market is really shifting.
Finally ask yourself this question; is the real estate in the housing market you’re looking in really more affordable? Unless a significant percentage of households in a market can afford to buy homes there, sales won’t rise. It’s as simple as that. So check your region’s affordability level. But don’t price yourself out of the housing market by waiting too long, because experts say that by the time foreclosures peak and start falling, the market will have already bottomed out and turned around. In other words, buyers will have missed the sweet spot.
If you are looking into buying a house right now, do your research, hire a thorough and honest real estate appraiser and real estate agent and ensure you are dealing with a reputable mortgage lender. If you are careful about your purchase and you time it right, you may just get yourself into your dream home.
If you are looking to buy a home, sell a home, refinance a home or find out what your current home is worth, please contact us at Mahler & Associates for all your appraisal needs.