Real Estate is Back!

After five long years of bad news, the prognosis for the health of the U.S. real estate market in 2013 is surprisingly strong. The largest real estate social network in the world, ActiveRain, recently surveyed 2,430 real estate professionals and found that there is great optimism regarding the future of the U.S. real estate market and economy. Since U.S. economic recoveries often come on the back of the real estate market, a rebound in real estate is a great sign for the economy as well.Real Estate is Back

Thank you to The KCM Crew for this post.

3 Financial Reasons to Buy a Home NOW! (Part 1)

Part I – Prices Are Rising at an Accelerated Rate

The price of a home is the major consideration when deciding whether or not it makes financial sense to purchase a house. Experts are not only projecting that house values will increase in 2013. They are also more optomistic in the level of appreciation they are projecting as the market begins to heat up. Here are some examples:

The Home Price Expectation Survey

The latest survey of a nationwide panel of 118 economists, real estate experts and investment and market strategists reveals they project home values to end 2013 up an average of 4.6% according to the first quarter. This is after they had projected a 3.1% increase just three months ago.

Bank of America

In a report titled, Someone Say House Party?, Bank of America analysts revised their projections upward:

“Home prices continue to show momentum amid shrinking inventory and record high affordability, prompting us to revise up our original forecast of 4.7% for home prices this year. We now expect national home prices, as defined by the S&P Case Shiller home price index, to increase 8% this year.”

Capital Economics

According to a report in DSNews, Capital Economics also upgraded their prediction:

“Strong demand and tight inventory have brought existing home sales back to ‘normal’ levels, and further gains are possible, according to the latest market report from Capital Economics. Additionally, market conditions may prompt lenders to “loosen the purse strings slightly” and lend a little more freely.

These conditions, combined with broader economic indicators, lead Capital Economics to revise its previous forecast of a 5% price gain this year up to 8%.”

Morgan Stanley

In an article from HousingWire, Morgan Stanley joined the party:

“Strong momentum in home prices as well as housing activity gave Morgan Stanley analysts enough confidence to upgrade their home price appreciation projections to roughly 7% (from 5%) for 2013, according to its latest global securitized credit report…

“The momentum in most metrics of housing activity is running well ahead of the pace we had expected,” said James Egan, Jose Cambronero and Vishwanath Tirupattur, analysts for Morgan Stanley.” 

Not only are prices projected to appreciate. Experts are actually revising their projections upward as demand maintains its momentum.

Tomorrow, we will look at increasing interest rates.

 

Thank you to the KCM Crew for the post.

 

 

Are Young Adults Buying Homes Again?


Sales of residential properties are back to the highs experienced at the expiration of the Home Buyers Tax Credit in April 2010. One of the reasons for this surge in purchasing is that young adults may again be entering the market.

Over the last few years, many young adults stayed on the sidelines (some in their parents’ homes) while waiting for the overall economy and the housing market to stabilize. This group represents a pent-up purchasing demand which is now coming to market.

Last summer, the Joint Center for Housing Studies at Harvard University released a study which addressed this demographic:

“Surveys consistently find that the overwhelming majority of young adults plan to own a home in the future, but many would-be buyers have stayed on the sidelines waiting for the job outlook to improve and house prices to stop falling. But as markets tighten, these fence-sitters may begin to take advantage of today’s lower home prices and unusually low mortgage rates.”

This may be taking place already.

It seems this is beginning to take place. The Census Bureau recently reported that annual household formations are almost back to boom time numbers:

  • § Boom Years: 1,250,000 annual formations
  • § 2008-2011: 650,000 annual formations
  • § 2012: 1,150,000 annual formations

Freddie Mac is projecting 1,250,000 new household formations in 2013.

These new households will be divided between purchases and rentals. However, we must realize this group believes strongly in homeownership. Here are three examples:

  1. 43% of young adults between the ages of 18-34 years old already own a home.
  2. 72% of young adults between the ages of 18-34 years old see homeownership as part of their personal American Dream.
  3. 93% of young adults between the ages of 18-34 years old, who currently rent, plan to buy a home.

It will be interesting to follow this trend as prices rise and interest rates inch upward.

 

 

 

 

Hiking Trails In Arizona!

The Arizona landscape is so diverse from the desert and mountain hiking trails in the Phoenix, Scottsdale and Tucson areas to the cool high country of Northern Arizona, Arizona Lakes, Rivers, Grand Canyon, Superstition Mountains, White Mountains, Slot Canyons and wilderness backcountry. Hiking Arizona trails is a magical experience whether you choose short, easy hikes or long strenuous hikes. There are beginner trails, day urban hikes and trails that only the experienced should attempt.

There are literally hundreds and hundreds of trails scattered throughout Arizona and the best way to expose an Arizona resident or vacationer to the wide variety of hiking choices is to give you links to some of the best Arizona hiking websites and web pages.

Greater Phoenix Trails

Northern Arizona Hiking Trails

White Mountains Hiking Trails

Southern Arizona Hiking

Southern Arizona Hiking Trails

Highly Recommended Hiking Websites

Arizona Hiking Trails
This is one of the most in depth, comprehensive Arizona Hiking websites on the web listing over 100 hiking trails in Arizona with detailed overviews. Select trails by Arizona region.

Weekend Warriors Hiking Guide

 

This website overviews over a hundred Arizona trails including directions and maps. You can spend hours in this website.

 

Thank you to our friends at Arizona Highways.

Is There a Window of Opportunity for Sellers Right Now?

One of the most interesting revelations of the latest National Association of Realtors (NAR) Existing Home Sales Reportis the shortage of housing inventory being reported throughout much of the country. At the same time, buyer demand is dramatically up over last year.  Here are some key points:

  • Total housing inventory at the end of January fell 4.9 percent to 1.74 million existing homes available for sale, which represents a 4.2-month supply at the current sales pace.
  • This represents the lowest housing supply since April 2005 when it was also 4.2 months.
  • Listed inventory is 25.3 percent below a year ago when there was a 6.2-month supply.
  • Raw unsold inventory is at the lowest level since December 1999 when there were 1.71 million homes on the market.

What Does This Mean if You Are Selling a Home?

The price of anything is determined by supply and demand. According to NAR’s report, inventory is at its lowest level since the real estate boom eight years ago. At the same time, demand is up. Lawrence Yun, NAR chief economist, reveals:

“Buyer traffic is continuing to pick up, while seller traffic is holding steady. In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country.”

Does that mean you should sell your house now? Or should you wait to see if prices increase? Nobody knows for sure. However, some feel that there may be a pent-up inventory about to come to the market because, as prices increase, it will free up some sellers who have been locked in a negative equity situation (where the house is worth less than the remaining mortgage).

Thank you to The KCM Blog for this post.

5 Reasons To Buy A Home Now Instead of Spring

Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying:
Supply Is Shrinking
With inventory declining in many regions, finding a home of your dreams may become more difficult going forward. There are buyers in more and more markets surprised that there is no longer a large assortment of houses to choose from. The best homes in the best locations sell first. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy.
Price Increases Are on the Horizon
Prices were expected to bounce along the bottom this winter. However, many pricing indices (examples: CoreLogic, FHFA, LPS, Case Shiller) are reporting that prices are continuing to rise.
Rents Are Skyrocketing
Rents historically increase by 3.2% on an annual basis. A study issued earlier this year projects rent increases of 4% for the next two years. Trulia recently reported that rents this year have actually shot up by 5.4%.
Interest Rates Are Projected to Rise
The Mortgage Bankers Association has projected that the 30-year mortgage interest rate will be 4.4% by the end of 2013. That is an increase of approximately one full point over current rates.
Buy Low, Sell High
We would all agree that, when investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’. It’s time to buy.