Today’s real estate news
First Timers Back In The Market
Unlike the years following the Great Recession, in which investors with fistfuls of cash dominated distressed markets, 2016 saw first time buyers making their mark. First-time buyers, according to the National Association of Realtors (NAR), accounted for 35 percent of home sales in 2016.
If you’re a first-time buyer, you’ll face less competition from investors, as distressed sales continue to drop. The share of investor purchases fell in 2016 from its 2011 high of nearly 40 percent to 26.5 percent, and it’s heading back to normal levels of 22 percent.
There’s Room For More Price Increases
While home values have hit their pre-recession levels, if you take inflation into account and think in 2017 dollars, there is room to rise. In what economists call “real” terms, prices have another 9 to 16 percent to go to hit their 2006 marks.
The report says, “Rising home prices and historically low inventories of homes for sale are barriers to entry for many potential homebuyers, especially those seeking to relocate to the high cost metros where price appreciation is outpacing increases in the rest of the country.”
Challenge Creates Opportunity
The conclusions here may be disheartening if you don’t already own a home. However, there is good news as well.
Home prices have stabilized, with fewer distressed sales and fewer underwater properties. There is a shortage of housing that will probably not be resolved soon. That means those who buy houses now can be reasonably confident that the values will hold or increase.
Mortgage rates are still very low, but most industry insiders believe they are rising slowly.
In other words, it will cost more in the future to buy and finance property than it currently does. You can thwart these price and rate increases by purchasing property as soon as you reasonably can.