The Rise in Real Estate


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The big news in the real estate market is it is on an upward swing. The markets that took the biggest fall during the crash of the lending institutions in 2008 are the ones now showing the most growth. Sellers are optimistic that there homes will rise in value.

As in any business, it is all about supply and demand. The lower the inventory, the higher the price. Inventories throughout the United States are dwindling as more and more of the short sales are either being sold or the bank has made a new deal with the homeowners and letting them stay in their homes by restructuring their loans. This loss of inventory will drive the prices up, the best sign of a healthy market since 2008. The east and west coast are experiencing the most growth with a smaller gain for the midwest  and southern states.

Here in Florida, vacation properties are now back to bidding wars on the best deals. Foreclosures are few and far between and when they do come on the market, they go in contract with multiple offers within a week. New construction is bursting as the seams and lots are selling at a 70% increase from last year.

The NAR (National Association of Realtors) posted a statement from Freddie Mac on their website this week that indicated that another large batch of foreclosures from the banks is soon to be released. The savvy buyers should stay on high alert for them to hit the market and be prepared to offer their highest and best offer the first time around. Unlike the last few years, where buyers could come in on offers significantly below the asking price. . . and had a fair shot of  winning the bid, those days are gone. The foreclosures that are coming in this batch will be priced closer to true market value and are expected to sell fast.

My advise for buyers is to work closely with their Realtor to watch for these deals. Many will never hit the market because they will be purchased in large lots by corporate investors. The single family buyer will have to move fast to stay in the game.

What about sellers? What does this mean to them? I believe sellers can expect to see a slight gain in their home values but they must remember that the climb back up the hill will be much slower and laborious than the slippery slide down. Many home prices in parts of the country (including my location in SW Florida) were artificially inflated in the the first place, and even with a climb up, they  will probably never come back to its peak. The amount of joy your received by living in your home should be factored as equity spent.

For a short time, I believe both buyers and sellers are going to get a fair shake. ImageThis is a very rare situation. Usually it is either a strong buyers market or the scales are tipped favorably to the seller. In this short window, BOTH sides will see fair market value and either side can walk away from the transaction feeling good about their decision. It is time for both sides to get off the fence.

 

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