The fireworks have gone off, the confetti was scattered and the party hats have been put away – which can only mean one thing: it’s time to jumpstart a new year. It looks like 2013 is going to have a lot in store for us, starting with real estate market predictions.
2012 in review:
In 2012, market conditions were generally still favorable to buyers and many were able to take advantage of the historically low mortgage rates and simultaneous dip in home values. However, last year also saw the beginnings of a market upturn, with rising home values after 5 years in the dumps. During the peak of the recession in 2009, foreclosures were at 6.89% – which fell off during 2012 to 5.41%, further indicating the beginning of the end to the recession. By all accounts, 2012 was a mixed year for real estate, but it appears that the tides are turning.
First time homebuyers:
We are happy to report that it seems the recession will soon be a thing of the past, especially here in Seattle. Among the hardest hit in the recession were young people, with a joblessness rate of 9.2% compared to 8.7% for all adults. However, unemployment among young workers has fallen to 7.9% and all indications are that it will continue to go down in 2013. This means that first-time homebuyers, which had all but disappeared during the recession, may be coming back into the fold as they find new jobs and look to move into their own properties.
Home sale prices on the the rise:
Particularly here in Seattle, home sale prices are on the rise. This means that conditions are ripe and getting riper for sellers. In fact, it was recently reported that Seattle is among the top-10 seller’s markets in the the nation. For the upcoming year, we can expect double-digit increases in property values. Expert forecasters have predicted a 15 percent increase from June 2012 to June 2013.
Rates staying low this year:
Cheap money has definitely helped the housing market recover. Average interest rates on 30 year fixed mortgages fell to new lows. With December remaining, rates this year averaged 3.68%, lower than 4.45% in 2011 and 4.69% in 2010. Certainly, rates can’t stay low forever; the Federal Reserve has decided to leave rates untouched until the unemployment rate reaches 6.5%. This means that rates will likely stay low into 2015.
What should I do?
If you are planning to buy a home in 2013, we encourage you to do it sooner rather than later. Each passing day means higher home sale prices. Why not take advantage of the low mortgage rates while you still can? This year it will also become a bit easier to obtain a mortgage; we can expect lenders to relax the rules with increased confidence in the economic conditions. However, if you can qualify now, it is best to pull the trigger before home prices go up.
If you’re planning on selling a home in 2013, it would be best to list your home in the first several months of the year. With the strikingly low inventory, your house will be sure to sell quick. Especially if your home is in a desirable area and in good condition, you can expect multiple offers.
From the real estate experts here at Team Troy, we wish you a very happy start to 2013! Be sure to keep an eye on our blog for future real estate updates, advice, and home ideas the whole year round.