As the housing market continues to recover from the historic downturn that began in 2008, both buyers and sellers are seeing benefits in the market. From expanding, quality inventory to reasonable interest rates, real estate looks like it’s on a steady rise toward a bountiful 2014.
Realtors are seeing the signs of a stronger market, and harnessing clients almost every day. Recently struggling consumers have become smart spenders, and potentially ready to apply a substantial down payment on the perfect property.
Home prices rise
One of the key signs of an improving market is rising home prices. Because residential properties lost almost half their value during the recession, buyers and sellers saw little or no movement in terms of financing. Loans were just not coming through, which made many real estate transactions challenging, if not all but impossible.
However, rising values in 2013 have paved the way for a healthy 2014 market. For example, the average increase in property values over the past year was nearly 11 percent. Although this percentage may appear modest compared to the best years of the 90s and the early part of the last decade, it’s a sign that recovery may finally be on a steady track.
Recovery through balance
If the value increase had been larger than 11 percent, for example 20 percent, the market would be less likely to have such a positive outlook for 2014. Extremely high sales prices may excite sellers, but they’re more likely to leave potential buyers struggling for funding.
To have a true recovering real-estate economy, there must be a balance that benefits both buyers and sellers. The latter must realize a reasonable profit from a property sale, and buyers need to have enough money on hand or through financing to pay for the home.
Although housing values may end up rising only 6 or 7 percent this year, a steady increase of that magnitude will encourage refinancing options. For example, at a 7.25 percent rate, struggling homeowners may have enough equity in their homes to refinance at a lower rate, such as 4 or 5 percent.
As a result, their extra funds can be channeled to other financial pursuits, including second homes. The real estate market could see more sales of vacation homes as homeowners finally rise out of low equity woes.
Bids slightly above the asking price
In the past, buyers would offer bids below the asking price, and force the seller to lodge a counter offer. However, 2014’s relatively balanced real estate market makes it more difficult to play this kind of cat-and-mouse game.
When there are multiple bids on a home, the seller cannot counter-offer every one. Thus, buyers can be shut out of a property without a word from the seller. With an experienced Realtor in the buyer’s region, a reasonable offer can be made, which is typically above the asking price.
Both buyers and sellers are seeing their property opportunities rise as 2014 proceeds. The popular spring season is approaching, and Realtors are looking for strong sales with cautious buyers.
With many home loan programs ready for buyers, even people with somewhat poor credit can find a lender who has reasonable rates. Helping people get into affordable homes will boost the nation’s economy.