24 Feb Real Estate Market – More Good News!
There have been a rash of good news stories regarding the real estate market in the last few weeks but here are 3 that we think everyone should be aware of. Buyers and sellers, these affect you both!
First, there was a local Atlanta news story the other night that spoke of 12 Metro Atlanta neighborhoods whose sales have just taken off since the beginning of 2012! In almost every case these neighborhoods are spread across the top end perimeter including Johns Creek, Roswell, Dunwoody, Sandy Springs and East Cobb but touching inside the perimeter, Buckhead and Brookhaven are included as well. A local realtor mentioned that sales were higher than anything seen in the last decade!! That’s saying something. If this holds for another few weeks you can be assured that housing prices in these sought after neighborhoods will begin rising as the competition heats up and the results of the following news stories hit the market.
Housing Crisis to End in 2012
as Banks Loosen Credit Standards
Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.
The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago. Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability. Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential home buyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability. (DSnews.com)
Mortgage Rates Cling to
Record Lows This Week
The average rate on the 30-year fixed mortgage stayed at a record low this week, providing some added incentive for those looking to buy a home or refinance.
Mortgage buyer Freddie Mac says the rate on the 30-year loan was unchanged at 3.87 percent.
The average on the 15-year fixed mortgage rose to 3.16 percent, up from last week’s record low of 3.14 percent. Records for mortgage rates date back to the 1950s.
Still, low rates have done little to boost the struggling housing market. Rates have been below 5 percent for all but two weeks in the past year. Yet few people can qualify to buy a home or refinance. Many of those who can have already done so. (msnbc.com)
So, take all this news together and what have you got? The Real Estate Market is on its way back!!
Buyers, it’s still your market but that won’t be lasting too much longer. If you’ve been holding out, find your house now now. Mortgage rates are sure to begin to rebound and if you’ve been wanting a home in one of those 12 Atlanta neighborhoods where sales are soaring, rock bottom prices won’t last much longer.
Sellers, your misery should be coming to end – albeit slowly, but things should steadily improve as 2012 continues. If you’ve been waiting for the market to improve before listing your home, now may be an excellent time, especially if you live in a top-end perimeter neighborhood.
Buyer or seller – let The Anderson Group assist you!