Trends for Summer 2013 Homebuyers
Since news of a reviving housing market emerged, many homeowners are now seeing themselves wealthier with the added bonus provided by the huge upsurge in home prices. This sense of newfound wealth gives more buying power to citizens and pushes them to spend, thus creating a healthy economic effect. For those who are planning to buy new homes in the atmosphere of the residential real estate market, here are some trends to look out for.
The majority of homes left unsold during the last market collapse now have their owners. Reports in February showed that there are less than 2 million available homes nationwide. This means that the current inventory of available homes is projected to last for less than five month. Compare this to the 6.4-month supply of homes during the same month last year. Even worse is that other markets in the country are seeing less than a three-month supply of available residences. While basic economics suggests that an increase in price would drive supply up, the reality that the inventory of homes will rise fast enough to catch up with the staggering demand remains nebulous at best.
Leaning away from the traditional
As supply gets weaker and demand continuously spikes, many homebuyers are resorting to unconventional methods of buying their new home. From knocking on doors to writing letters to the owners and tracking owners who might not even have listed their homes in market, house hunters are now willing to go to great lengths just to start a deal.
Record low rates
Mortgage rates are now reaching historic lows. While these rates have experienced a slow bump during the past week, they are not rising fast enough. The Federal Reserve is expected to cut back on its stimulus program. Once that is done, everybody should watch out for a gradual increase in mortgage rates.
With the supply still not catching up with the demand, homebuyers are resorting to bidding wars. Cities like New York, California, Boston, Seattle and Washington are seeing its homebuyers go head-to-head as to who can offer the best price for their dream home. This poses a challenge to first-time buyers wishing to enter the market and take advantage of the increasing home values. And with big ticket investors also joining the fray, small players are seeing themselves at the sidelines while the big guys make offer way past the asking price and cough up cash up front.