The moribund real estate market in the US took half a decade but finally it is showing marked signs of recovery. Are you now thinking of making a move on a particular real estate property, now that prices appear to have leveled off?
If answered yes, experts say that this is possibly the right time to take the plunge. In most places around the United States of America, you can still take advantage of the low prices of the real estate properties and to add to your joys, the present mortgage rates are at once-in-a-lifetime-record low levels. The 15 year and 30 year fixed mortgage loans are being lent to people at an interest rate of 3% and 4% respectively and this is the reason that a large number of struggling homeowners are now opting for mortgage refinance.
Although the prices of properties are also at their 2003 record low levels, the signs of an imminent resurrection are everywhere you look. In the month of March, 2012, the number of people signing contracts to purchase homes rose by 5%, according to the reports of the National Association of Realtors, the highest level in the last 2 years.
There are many prospective homebuyers who are shocked that one clash of the bubble era is back again. As per the studies conducted by Wall Street Journal, there are less homes for sale in many markets than what there were last quarter. There is a comparatively tight inventory in markets like Phoenix, Sacramento, Washington, D.C., leading mortgage experts to caution that the law of supply and demand is going to kick in soon.
Are buyers more interested short sales and foreclosures?
No, according to recent studies, prospective homebuyers are shying away from these. Many foreclosure specialists are of the opinion that there are wars over foreclosures, as investors are sure that such rock-bottom prices aren’t going to last forever. An increase in the number of short sales is actually a positive sign, as short sales cause less harm than foreclosure. Foreclosures drive values down and furthermore, foreclosed homes often fall prey to neglect and vandalism.
For banks, short sales are better as they can let go of distressed properties without having to pay so many administrative costs. Short sales have already eclipsed foreclosure sales in the last quarter of 2011 and this shows a constant rise in the number of short sales as compared to foreclosure sales.
Are more buyers investing in vacation homes?
The real estate recovery is being driven by the fact that an increasingly large number of buyers are snapping up vacation homes. Since 2011, vacation home sales have grown by 8% and this rise is primarily due to the fact that more people are looking for ‘getaways’ that are closer to their primary residences so they can curb their travel costs.
Buying investment properties has also risen by 66%, as there are many investors scooping up cheap foreclosure properties and renting them out. Experts are saying that the foreclosure to rental conversion business could soon be worth $100 billion a year. Buyers are slowly beginning to comprehend the huge potential of the real estate investing market, with more than a quarter of houses sold in 2011 being investment properties. This is one of the reasons why homeownership hit a rock bottom level in the first quarter of the year, as per the data from the US Census Bureau.
As soon as the mortgage lending rules loosen up, there will be more renters who would love to become homeowners. As young adults in the US are clobbered by high interest student loan debt, this is keeping them from taking the plunge into the US housing market. Economists are of the opinion that as financial stability is restored in the US, there will be a marked improvement in the real estate market too.
About the Author: Chris loves to write financial articles and she is a contributory writer associated with many financial communities and has written several articles on debt consolidation, debt settlement, loan, mortgage, loan mortgage calculator for various financial websites. She holds her expertise in the Debt industry and has made significant contribution through her various articles.