Friday, January 11, 2013
Housing Affordability Peaks as Home Buyers Get Serious
Tampa’s real estate market continues the upward trend that 2012 produced. Buyers and the affordability of housing are getting noticed.
Following 11 months of positive data from the National Association of Realtors regarding housing affordability and mortgage rates, we can expect to see more and more home buyers step into the home purchasing arena. Jobless rates continue to fall according to Trulia economist, Jed Kolko, especially for 25- 34 year olds which make up the prime age for housing demand. The national unemployment rate dipped down to 7.7% in December for the age group most ready to purchase real estate. Construction jobs also posted strong gains which not only equals more housing availability, but more people with jobs and paying taxes.
Housing affordability is measured on an index which takes in account the median home price, median household income and average mortgage rates. The higher the number, the more home “purchasing power” buyers possess. We ended the year at an index of 198.2 for 2012, and many see this number increasing in 2013 due to such tight underwriting practices being changed.
The amount of shadow inventory has had an effect on home buyers and sellers also. The number of homes that are either in foreclosure, or are seriously delinquent, has dropped 300,000 units from October 2011 to October 2012. An increasing number of loan modifications and short sales have helped keep negative pressure off prices of homes located near these distressed properties. Investors will continue to snag any remaining “real estate deals” as we progress through 2013, but should also be advised the property availability is low. Acting swiftly will be key if they are looking for a higher return.
Real estate is swiftly moving to a seller’s market. More to come on how seller’s are stepping in with confidence.Whether you are a cautious home buyer or seller, a sophisticated investor, or a renter who is tired of wasting money on a home you cannot call your own; give SI Real Estate a call today so we can discuss the steps that will lead you to your real estate goals.