Today's papers cite that national sales figures have risen in January, pushing the index used for measuring the health of the market to 97. The number used for a balanced market is 100, so we can see that things are not only getting better, but that they are approaching "normal". We need to remember that what we had in the middle of the last decade would be considered abnormally good, so there shouldn't be expectations that we will return to that dynamic any time soon. However, it is clear that there is pent-up demand out there, particularly from first-time buyers, and it is starting to seem likely that the momentum we are gaining will feed upon itself and lead to further upticks.
More spring weather, more home sales--what could be better??
Tuesday, February 28, 2012
Tuesday, February 21, 2012
Open Houses Rule
This weekend, despite being at one end or the other of just about every school system's vacation week, was a big one for open houses. Some had as many as 25 people at them. The market seems driven by first-time home buyers (proving that they are the one group that probably doesn't need an incentive to want to buy), who want to take advantage of low rates and low prices. Of course, it is usually their parents who have to let them know how low rates are, since anyone under 35 wouldn't remember high ones. (Conversely, my husband and I bought our first home in 1982 with an 18.75 % special low rate, that seemed OK to us, given that other mortgages were at 21%---it's all relative!).
Houses are starting to come onto the market at springtime pace, and buyers are out there to take advantage of the rates, the choices, and the weather. Let's hope it keeps up at this rate!
Houses are starting to come onto the market at springtime pace, and buyers are out there to take advantage of the rates, the choices, and the weather. Let's hope it keeps up at this rate!
Monday, February 13, 2012
Rent or Buy Decisions Now
The New York Times recently had a real estate section cover story about how both sales prices and rental rates were out of sight for many areas of NYC. There didn't seem to be a good choice for someone looking to move to make. Here, we see things as being different. Rentals in our region are increasingly scarce. New Haven has the lowest apartment vacancy rate in the country. In addition, we haven't seen the wave of foreclosures that people think may be coming in our state. If or when it does, that will mean that large numbers of people will go from being owners to being renters, for at least the seven years that they will need to wait before they can borrow again. Where are they all going to go?
On the other side of the equation, prices for homes are low. Very low. And so are mortgage rates. That makes it a good time to buy, if you believe that prices are going to rise. In that regard, we got some help from a Trulia article, albeit a backhanded compliment. Greater New Haven was listed among the ten cities where the number of people looking to move out most exceeds the number of people looking to move in. It also predicted that prices would go down a couple of percent by the third quarter of this year. BUT, it went on to say that price increases would average 5.3% per year through 2016, meaning that someone who buys a home and plans to hold onto it for five years, whether living in it or renting it out, will be likely to get quite a bit more for it when he or she goes to sell.
That seems to me to make the rent versus buy decision pretty simple around here. It's the time to buy.
On the other side of the equation, prices for homes are low. Very low. And so are mortgage rates. That makes it a good time to buy, if you believe that prices are going to rise. In that regard, we got some help from a Trulia article, albeit a backhanded compliment. Greater New Haven was listed among the ten cities where the number of people looking to move out most exceeds the number of people looking to move in. It also predicted that prices would go down a couple of percent by the third quarter of this year. BUT, it went on to say that price increases would average 5.3% per year through 2016, meaning that someone who buys a home and plans to hold onto it for five years, whether living in it or renting it out, will be likely to get quite a bit more for it when he or she goes to sell.
That seems to me to make the rent versus buy decision pretty simple around here. It's the time to buy.
Tuesday, February 7, 2012
New Construction
There's another sign out there that things are improving. We are starting to see new construction again. When prices go down, new construction has a hard time competing, since the costs of land, site improvements, labor, and materials don't really go down much, so new construction can't compare to the price of a home that was built a few years ago. In addition, loans are harder to get, and most builders find it difficult to get financing for projects. Add in the time a completed home could sit on the market before selling, and you don't see much being started.
Lately, statistics from around the country show housing starts beginning to rise. We're at the end of that increase, since we don't have as much land, as much new employment, and costs as low as some other states. Even we, however, are noticing activity. There is always a portion of the buying public that seeks out new construction, especially people moving from other places, who want their new home to look like the home they left behind. In recent years, many of them have turned to renting, either because they left behind an unsold home, or because they were worried that it was the wrong time to be buying. Eventually, even the most skittish will want to settle down. And it looks as though that time may be upon us--good news for everyone!
Lately, statistics from around the country show housing starts beginning to rise. We're at the end of that increase, since we don't have as much land, as much new employment, and costs as low as some other states. Even we, however, are noticing activity. There is always a portion of the buying public that seeks out new construction, especially people moving from other places, who want their new home to look like the home they left behind. In recent years, many of them have turned to renting, either because they left behind an unsold home, or because they were worried that it was the wrong time to be buying. Eventually, even the most skittish will want to settle down. And it looks as though that time may be upon us--good news for everyone!
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