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Health & Fitness

Your Home Buy/Sell Choices Depend Hugely on These Few Factors

50% of Americans polled expect the housing market to improve in 2013, while only 16 percent say they expect it to get worse, per Bloomberg. What do you say? Gimme your comments below.

Your biggest asset before buying a home is knowledge of the market.

My good friends, Bob and Katie Howe, the father and daughter team which owns Orange County Lender.com  are always analyzing the housing market and helping home buyers get the best possible loans.

They just sent me their weekly study and I've included much of it here---

Find out what's happening in San Clementewith free, real-time updates from Patch.

Who would have thought that we could be entering the home selling season with a headline which says there are not enough homes for sale?

After all, analysts had warned that the shadow inventory of homes held by banks would weigh down the markets for years to come. Where did these millions of homes go?

Find out what's happening in San Clementewith free, real-time updates from Patch.

Many were foreclosed upon. Others were sold by short sale rather than going through the foreclosure process as foreign and domestic investors bought millions of bargains.

Also, many others were modified to help homeowners to remain in their homes as the economy has gotten stronger and provided more jobs for those who were unemployed. This stronger economy has meant that fewer home loans have moved into default in the past few years as well. On the other hand, there are still many homes waiting to be foreclosed upon.

Even those who were foreclosed upon are starting to purchase again or need single family homes to rent. The question is not why is the inventory down, but will the lower inventory slow down the real estate market in the coming year? You can't have rising home sales with not enough homes for sale.

We think that two factors will increase inventory in the coming year.

Rising home prices will encourage more home owners to list their homes. And builders can create inventory by building more homes. Increased building activity is expected to help pump up the economy in the coming year.

If real estate demand continues to rise, expect banks to accelerate the process to get rid of homes in their inventory. In other words, we are expecting the low inventory "problem" to be self-correcting during the year -- unless new demand outstrips this additional supply..

Also, many others were modified to help homeowners remain in their homes as the economy has gotten stronger and provided more jobs for those who were unemployed.

This stronger economy has also meant that fewer home loans have moved into default in the past few years as well. On the other hand, there are still many homes waiting to be foreclosed upon.

How could we have a shortage of inventory at this juncture?

Investor demand along with population growth and rising household formulation have all combined to remove excess inventory.

Combine these factors with the fact that those who owe more than their homes are worth are reticent to sell. Even those who were foreclosed upon are starting to purchase again or need single family homes to rent.

The question is not why is the inventory down, but will the lower inventory slow down the real estate market in the coming year?

You can't have rising home sales with not enough homes for sale. We think that two factors will increase inventory in the coming year. Rising home prices will encourage more home owners to list their homes.

And builders can create inventory by building more homes. Increased building activity is expected to help pump up the economy in the coming year. If real estate demand continues to rise, expect banks to accelerate the process to get rid of homes in their inventory.

In other words, we are expecting the low inventory "problem" to be self-correcting during the year -- unless new demand outstrips this additional supply.

Fifty percent of Americans say they expect the housing market to improve in 2013, while 16 percent say they expect it to get worse, according to a Bloomberg National Poll of 1,003 adults.

What’s more, the majority of the Americans surveyed said they have big hopes that the improvement in the housing market will also help give a boost to the overall economy.

“Prices are very steadily, slowly, starting to creep back up,” Eric Matheny—an attorney from Fort Lauderdale, Fla., who recently purchased a new home—told Bloomberg. “The housing market is a major part of the economy, so it says something about the strength of the economy.”

More Americans are expressing optimism about the trajectory of home prices too. Twenty-seven percent expect their home values to rise while 16 percent said they expect their home’s value to fall. In the previous survey, 20 percent predicted that their home’s value would rise while 20 percent had said they expected values to fall. (Source: Bloomberg)

If you'd like to stay fully aware of the South Orange County real estate housing market by receiving my FREE, hugely informative, ultra-updated and colorful market report every two weeks, just drop me an email and I'll start sending it to you.

 

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