It seems as if the housing market in the United States is going through a bit of a rough patch. The question many ask themselves is, “Is the real estate market in the United States over or just underperforming?” If you’re thinking the economy is going to get worse before it gets better, think again.
The short answer to this question is, yes, indeed one can still see buyer’s markets in the United States even in today’s climate. The list includes 10 American housing markets that are viable and affordable by almost any measure, including interest rates. However, you will also find some signs of trouble ahead. The healthy housing markets are those that show signs of a possible downturn in prices due to increasing unemployment rates. It is in these markets that many investors are waiting for.
Buyer’s markets typically have higher home prices than in other types of economic climates. But the U.S. housing market has been plagued by signs of buyer’s remorse over recent months. That is why the Department of Housing and Urban Development issued a report last month calling on all Americans to begin looking at their credit scores. The report came as a surprise to many because home prices had not been affected by the recession in the way they had been in other countries. In fact, home prices have actually increased slightly since President Obama took office.
Now that interest rates are back on their normal ranges, many are looking for signs of buyer’s remorse. They worry that the high rates will cause too much pressure on borrowers to sell their homes. The report didn’t address whether that would cause a buyers’ market or not, but housing prices have decreased. Some experts say they may even go into a new recession before they recover.
One of the indicators, the government used to predict that a housing market was about to turn around was the rise of the home price index. It rose for a time before leveling off. However, a report released this week indicated that the index may have gone up again. One reason for this is that lenders are raising their rates.
Another of the housing market indicators that should cause concern is lower home sales. For some time in the past, home sales have usually topped out in the third quarter of each year. But now they have started to taper off. It may be a reflection of the current state of the economy, which is also causing alarm signs in other indicators.
Other indicators that indicate the healthiest housing markets include the number of home foreclosures. In an ideal economy, there are fewer foreclosures, because buyers have enough money to purchase a home. The problem is that the market has changed, and now banks are more reluctant to take a chance on a home buyer who is currently behind on mortgage payments. In fact, compared to what would be expected, the number of foreclosures has actually dropped slightly in the past month.
These are just a few of the indicators, the real-estate industry has been watching for some time. While the news regarding the state of the economy has been somewhat positive, it is still not good. But fortunately, these pandemic indicators provide a clear picture for the housing markets to watch. In the best case scenario, the improvement will last at least until the spring.
Another clear sign of better economic health is home sales. Historically, when homes begin to sell well, the demand increases. If a seller can manage to get his house listed for the same price or more than he sold it for, he will surely take off with a profit. This usually happens in real-estate markets where there are a lot of buyers looking for good deals. If this is happening in your area, then you should brace yourself for an influx of new buyers as long as there is no obvious economic health scare.
Surprisingly, a recent study revealed that the asking prices in the current pandemic market may slightly exceed those in April of last year. So if you have already locked in your asking price, there’s no need to worry. But if you have not done so, then now is the best time to do so. With less time for people to shop around, the sellers have more negotiating power, and thus a better chance at a good deal.
One thing to keep in mind though is that home sales may pick up after the hurricane season ends. The usual downturn that normally follows an economic downturn usually makes up for itself during the hurricane season. And since hurricane season usually lasts from June to November, there’s no better time than now to get your home sold. Get in touch with your realtor today so you can start on your plan to sell your home.