A
recent article by Bankrate.com on Yahoo Finance, entitled “5 Mortgage and
Housing Trends in Winter 2012,” noted some signs that new homebuyers and
existing homeowners in the Albuquerque, New Mexico area should think about.
The Times are A-Changing’
While it may seem like we’ve been wallowing in a deep recession forever, the timing couldn’t be better and it may actually be fast and fleeting if you don’t act soon. As the article noted, “There is no question this is still a buyers' market, but you'll find with a wave of investors in search of good deals, the bargain homes are selling at a much quicker pace. The low prices and low mortgage rates won't disappear overnight, but they won't last forever.”
That’s why it is important to take note of these five trends currently impacting this first quarter of 2012
1. Home prices are beginning to stabilize: Experts believe that the prices of homes have reached as low as they are likely to go, so it is expected that, after this first quarter, the only way is up for prices. Already, the fire-sale prices in areas like Las Vegas have started a feeding frenzy where houses are going fast. The article note that “nationally, the median home price of existing homes was 3.5 percent lower in November 2011 compared to the previous year, according to the National Association of Realtors, or NAR.”
2. HARP could lead to a surge in refi activity: With so many homeowners currently owing more on their mortgage than their house is worth, they have been unable to refinance to take advantage of the lower interest rates. However, the latest and greatest version of the Home Affordable Refinance Program will help more homeowners to refinance to that lower rate even if it is more than 125 percent of the value of their homes. Newer updates to the program are expected in February or March, which means that you should be ready to ask about that refinance opportunity soon.
3. Mortgage rates are likely to remain low: It is expected that interest rates will stay as low as they have been during this first quarter of 2012. The article noted that “the Mortgage Bankers Association estimates the average 30-year fixed rate will hover around 4.1 percent during the first half of the year, giving buyers and homeowners some extra time to take advantage of the historic rates.” However, as the economy picks up, don’t expect these rates to hang around forever.
4. Investors and foreign buyers invade the market: The National Association of Realtors found that an investor accounted for one of every five homes sold in 2011 many of whom were foreigners who were taking advantage of the weak dollar and low prices. Many of these investors (about 30 percent) are coming with cash in-hand and buying up homes in Miami, Las Vegas, and other hard-hit areas.
5. Foreclosures and short sales are moving quickly: You may have heard that it can take up to a year to get a short sale approved. Not so much anymore. The process has improved with the average short sale now closing in less than 90 days. This is because banks are more accustomed to the process and they have become more accepting of just getting the deals done. Foreclosures are also moving quickly, especially with so many investors ready to do cash deals. With demand so high for these, the supply is actually shrinking, which will eventually drive up the prices and which takes us back to trend #1 on this list.
What This Means for You
With trends like these, all signs point to a growing
economic recovery as well as opportunities that you do not want to miss. Prices
are low, rates are low, and the mortgage and refi processes are slowly becoming
more accepting. Now is the time to act!
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