As the new season springs forward, so do home buyers. The housing market resembles a scene of Hunger Games. May the odds be forever in your favor…
Relocating from Vegas, Simon and Leanne Laming are excited to move into their new home. Frankly, they feel lucky for finding a house in their price range, given that their old home sold for $166,000, and are committing to this $380,000 fixer upper in Ossining, New York.
Simon Laming says, “It was competitive. I mean we were in a bid negotiation – what do you call it like – a bidding war. So, we sort of had to go straight into that and deal with that… and I mean, that changes your whole perception. It blows some dreams. That makes you really evaluate what something is worth.”
Reuters Reporter, Bobbie, Rebell, says, “Prices in this suburb of New York City are still far from what they were at the peak of the market, but despite the harsh winter, weather buyers have been coming out and when priced right, properties are going fast.”
As we face spring head on, and kiss winter goodbye, home buyers are increasingly approached by higher prices and low inventory. After so many rock-bottom deals in the past, many are caught off guard.
Simon Laming says, “There were a few houses that we saw that you know disappeared that got snapped up off the market. And then this was luckily still here when we came here but…”
Leanna Laming says, “There weren’t many.”
Simon Laming says, “Yeah not too many.”
According to CoreLogic, home values are up 12% from a year ago. Such an increase, pushes down home sales… with February recording the lowest pace of sales in 19 months. Trulia Chief Economist Jed Kolko argues that’s it’s about affordability.
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Jed Kolko, Chief Economist of Trulia, says, “Prices are up about 10% year over year, and mortgage rates are up about a full point, which adds another 10% to the cost of a mortgage on a given home. That means that buying is roughly 20% more expensive for a given house right now than it was a year ago. That is particularly hard for first time home buyers. It also is a challenge for investors for whom the math of buying to rent places out doesn’t look as good as it did a year ago.”
The Lamings are a special case; they are experienced… and were able to get financing. First time buyers, on the other hand will have a much harder time.
Mark Seiden, Owner of Mark Seiden Real Estate Team, says, “Financing is still tight. The banks are very tight and they probably should be. I mean really what happened over the last few years? How many short sales there have been – and there have been quite a few around here.”
April shows the best monthly gain for building permits. And sentiment is improving as home builders approach their best season – spring. Lennar (LEN) and KB Home (KBH), two of the biggest U.S. home builders, recently reported strong profits. A better economy, coupled with more confident buyers, is a key indicator for a profitable season for home builders.