Here we are in a Brand New Year and staring at a new housing market.
As a Realtor, I am one of the first ones to welcome this change in market direction.
I have noticed that a lot of home owners are jumping into the market to sell. So we will have a little more inventory as we move closer to a par market, where sellers and buyers have to be equally agreeable as to the price they will agree on to meet their needs.
Although the prices have risen here in California, they still have a way to go for some home owners who are still upside down. For these home owners, this doesn’t seem like much of a recovery.
We will all be keeping an eye on the interest rates this year as they have been predicted to go up. Typically, when interest rates go up, home prices go down. But that may not particularly happen this year, as there are still a lot of cash investors and a growing number of international buyers coming into our market. This makes it tough for the first time home buyer, as well as making it very difficult for the FHA buyer to win an offer at the bargaining table.
Ideally, the residential real estate market in relation to the American Dream is that families can own a home. The FHA loan was set up to provide the family unit the ability to enter into home ownership. There are a few government regulations out there working, such as the bidding process for HUD homes, that don‘t allow an investor to purchase for the first so many days on the market. There is a program called Homepath that provides that only home owners can buy that particular home.
No matter what type of loan a buyer is applying for, money is king. A substantial down payment is needed for an FHA loan along with enough money to cover closing costs.
With so many challenges, the first time home buyer is going to need a lot more help than in previous generations. With lower paying jobs and having to live at parents’ homes longer, additional incentives will needed to be implemented to bridge the gap.
All in all, the future of the real estate economy will depend on what happens in Washington with our legislators and leaders. Hopefully, they will send back to our communities some great home purchase assistance programs such as some that we have seen in the past.
The market is great right now. So jump on in. It’s good for both sellers and buyers. Till next time, Nikki .