The Spring Market has begun and I can already see signs of increased activity in my office, and it will only get busier as we move forward. Buyers and sellers can take advantage of many favorable economic conditions this season, as long as they do their research, have realistic expectations, and have a good Realtor on their side. Three recent studies report the best affordability conditions the housing market has seen in 35 years:
- The S&P/Case-Shiller Home-Price Index, which tracks 20 markets, dropped 1% in December, marking the fifth straight price decline.
- Moody's Analytic's, who studies the ratio of income to housing prices, reports the average household needs about 19 months pay to afford the average home, that is down from 4 plus years for many areas during the boom.
- And a recent Trulia study shows it is cheaper to own than rent in many major markets.
Buyers- If you are secure in your job or source of income, it
is a very good time to buy, but even with the best affordability ever, you still should not buy more than you can afford, make sure your credit score is as healthy as it can be and save up enough for a big a down payment as you can to get the best possible mortgage rate. And speaking of mortgages, rates will not stay low forever, Freddie and Fannie are adding new fees, and mortgage insurance costs are rising too. Many experts advise you to be prepared to stay in the home for 10 years in order to recoup your investment, so it would be in your best interest to have an expert buyer's agent on your side who can help you get the best deal on the best house that fits your needs.
Sellers- you can't jump into this market without carefully pricing and preparing your home for a very competitive market. Buyers have to feel secure in the value of the home they buy, so you really need to paint, make repairs, update kitchens and baths, spruce up landscaping, exterior lighting, and paint or replace front doors, all to create more "curb appeal". Now more than ever you need an agent who really understands the market, to help you properly position your home with a price that will get it sold. If you have a listing that has been on and off the market for a few years, listen to negative feedback from previous showings without taking it personally. You have to be realistic about what is keeping your home from selling. Go to open houses of similar homes to see how they compare in appearance and price. Look at these properties with a buyer's eye, if your home does not have the updates or features buyers are looking for, either bite the bullet and do the necessary repairs, or lower your price.
This Week's Real Estate Insight: The economy remains to be a mixed bag as we enter the Spring Market, but there has been enough solid positive growth that sellers who have realistic expectations should be able to connect with buyers who are taking advantage of some of the best affordability conditions ever.
