It’s early in 2013, but there’s already been a lot of positive chatter about the real estate market that rode the coattails of 2012 right into the New Year. The final few months of 2012 saw an active real estate market that was characterized by buyers and sellers trying to close before the Fiscal Cliff deal levied new real estate-specific tax laws. Here’s a snapshot of how experts anticipate the real estate market looking as 2013 rolls along.
First-Time Buyers Increase: This is the year of the first-time buyer according to many experts. They believe neophyte home buyers will drive the demand for single-family homes, and according to a November NAR survey, 39% of borrowers were purchasing homes for the first time, which marks a 37% increase from their 2011 survey.
Rising Rents: For many young professionals, there has been no other choice but to rent. With lenders all but handcuffed by the backlog of foreclosures and stricter lending practices, it’s been difficult to secure financing. As such, rental rates have risen, and it stands to stay this way while renters wait for the real estate market to recover.
Trouble Finding Foreclosures?: Foreclosures are becoming more and more rare as lenders change the way they handle them. The Federal Housing Finance Agency (FHFA) and the Federal Deposit Insurance Corporation have worked tirelessly to help banks realize that bulk-selling troubled homes to buyers who will work with the original borrowers is better than a foreclosure.
More Short Sales: Part and parcel to the lack of foreclosures is the increase in short sales. Banks are realizing that short sales are much more attractive when it comparing the cost and duration of one against a foreclosure. As such, many experts agree that 2013 will see an increase in short sales.
Lack of Inventory Pushes Up Home Prices: Inventory levels are depressed around the country. A true issue of supply and demand, with not enough homes to go around and many people chomping at the bit to get in on the real estate market now, home prices are up around the country. In fact, inventory levels are at their lowest levels since February 2006, and the combination of low inventory and higher prices is expected to continue in 2013.