Since the housing bubble burst more than two years ago, families all across America have been holding onto to their houses. Many who considered selling decided to wait, which is good because many who considered buying decided to wait, too. But there are some indications the real estate market is beginning to recover. Depending on where you live, now may be a good time to think about buying (or selling) a home.
Opinions about current market conditions are mixed. While existing home sales increased 3.7 percent in March from the month prior, that’s 6.3 percent below the pace in March 2010, according to the National Association of Realtors (NAR). Still, an increase is good news, particularly when viewed in light of elevated sales in early 2010 because of the home buyer tax credit. Lawrence Yun, NAR chief economist, said he expects improving home sales to continue.
“Existing-home sales have risen in six of the past eight months, so we’re clearly on a recovery path,” Yun said.
While existing home sales appear to be on an upward trend, sales prices of existing homes nationally have been uneven, increasing just six of the past 12 months. The average sales price of an existing home was $214,500 in March 2010, $231,700 in July 2010, $218,100 in November 2010, and $207,000 in March 2011, according to the NAR.
So, what does all this data mean? It means that home prices are recovering, albeit unevenly, and buyers are steadily purchasing more homes.
While there are many good indicators that we’re past the worst part of the housing crisis, most real estate experts don’t have high hopes for this year’s housing market. They expect sales to be slow, and some even expect that home prices will drop a little bit more before they begin to fully rebound.
To Buy or Not to Buy…
If you’re considering buying a home in the near future, there are two things to keep in mind. First, where do you live? The drop in average home prices over the last year was less dramatic in the Northeast and Midwest than it was in the South and West. If you live in an area that has experienced greater volatility, it may be best to hold off buying a house until a definite positive trend has been established. As each region experienced at least a slight uptick in average home prices from February to March, you may want to wait just a few more months to see if these improvements continue.
The next thing to consider is your credit. Mortgage lenders have tightened their criteria as a result of the housing crisis and fewer people now qualify for good mortgage rates – or a mortgage at all. If you have a good credit score and can make a down payment, buying home may be a good idea (depending on where you live). If, however, you need 100 percent financing or you have a low credit score, you may have to wait, as you may not qualify for a mortgage right now. In the meantime, work on saving up more for a down payment and take advantage of online programs that show you how to reach your full credit potential.
For home sellers, the most important thing to consider is the current pricing trend (and the duration of the trend) in your region. If you live in a place where home prices have generally been more stable, this could be a good time to put your home on the market. However, if you live in a region that saw significant declines in property values, consider waiting.
And of course, whether you’re thinking about buying or selling, you always want to talk to a licensed, experienced Realtor. He or she will have a good understanding of your housing market and will be able to give you information and advice to help you decide what to do.
The housing market may, in fact, be at the beginning of a recovery, but only time will tell. Until then (and always, really) carefully weigh the pros and cons before buying a home.
For more information about whether now is the right time for YOU to buy a home, check out Quizzle.com, where you’ll get access to a free home buyer’s toolkit to walk you through the process and free home loan recommendations to find out how much home you can afford.
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