In the article the writer cites three major reasons to support the opinion;
home prices, supply and mortgage rates. Home sales the past several months in
northeast Wisconsin support the conclusion.
For most of us we have never seen home prices as low as this in our
lifetimes. Low home prices have led some buyers to get the “deal of the decade,”
and lend support to the theory that purchasing now reinforces the benefit of
home ownership as a long term investment as values rise. Housing is cyclical and
as the supply and demand effect begins to affect the market it’s reasonable to
conclude values and prices will rise.
The National Association of Realtors continues to report their housing
affordability index at the highest level on record. The index tracks average
family incomes compared to the affordability of the average home. As rents rise
the affordability gap between renting and owning shrinks and in some cases
becomes inverted where home ownership costs less than renting.
There is still an abundance of homes on the market in most price ranges. As
sales rise and homeowner’s who have wanted to sell list their homes it provides
buyers with a continuous flow of inventory from which to choose their new home.
The inventory has declined as sales increase but there are still many homes on
the market.
The third element in the trifecta is mortgage rates. The 30-year fixed rate
mortgage for home purchases continues to hover around 3.50 percent. The astute
buyers who lock in the interest rate now will save thousands if not tens of
thousands of dollars over the life of the loan. With home prices, the low rates
contribute significantly to housing affordability.
Homes sales in Wisconsin were up 17.3 percent in July and 20.3 percent in
August compared to the same months in 2011. These positive sales statistics
support the notion that many astute consumers are taking advantage of the
benefits of purchasing now.
Who are these buyers? Many are first time buyers leaving renting for the
benefits of homeownership. Some are move-up buyers who have successfully sold
their existing home and they’re purchasing the next home. Some are baby-boomers
downsizing; leaving the two-story, four bedroom, family home for the single
level ranch or condominium with less required maintenance.
Some buyers are purchasing second homes and leveraging the market to fulfill
that dream of owning a second home. Some buyers are relocating from other parts
of the country and have either sold their previous home, or in some cases,
rented it until the market from which their relocating improves and the previous
home sells.
It appears the greatest activity is in the lower price ranges but home sales
have improved in all price ranges. With the expert assistance of Realtors,
sellers listing their homes at prices commensurate with the marketplace have
provided for quicker sales and less issues with appraisal values when buyers and
sellers agree on terms.
Home purchase and financing tip: When planning on buying or selling,
seek the best advice from the professionals in the market. Enlist the help of
friends, relatives, neighbors in indentifying the professionals with the best
reputation based on performance. This is the best guarantee for a positive
experience.
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