There are two aspects that must be evaluated: house sales and house prices. They will not recover at the same time. Sales are already increasing rather nicely while prices will still soften in many markets through 2012.
We are seeing an increase in pended sales YTD over 30% higher than this time last year. Homes prices are bottoming out, but we can't say the word "appreciation" just yet, except for some small pockets in our market. The National Mortgage Settlement has given banks a roadmap showing them how to work with the backlog of foreclosures (known as shadow inventory) that has been hanging over the housing market for more than a year. These distressed properties will fullfill a big part of the demand that is out there today, keeping traditional home sale prices from rebounding as sales do.
The good news is that the "value" of homes is up! I work with buyer's to look at the COST of purchasing a house more than the PRICE of the home. Obviously, price is part of the cost equation. The other piece, assuming my client isn't a cash buyer, is the mortgage rate. The mortgage rate to finance a purchase can have a dramatic impact on the overall cost. I also have cash buyers who choose to get mortgages so they can keep their investments in the portfolios they have established.
There are many pieces to the puzzle to consider as part of this current market we are in. Contact me if you think you want to make a change, and I can help you review if it would be a good thing to wait, or a smart move to make now.
