Housing recovery a long way to NORMAL

A new year and maybe new hope, I stopped writing for so long because nothing has changed, but a new year brings new HOPE! ha maybe-Forecasts for home price gains of a couple percentage points this year seem possible. There is rising debate among real estate analysts on whether some recovery calls are getting overheated. Nationally the skeptics are barking, the rosy forecast for rising home prices is strickly local trends and cannot be considered a positive trend, moreover the stablization of the markets IS trending upward. That means the markets are improving, but not necessarily going to go up quickly.
Most likely the housing market will trend sideways or slightly up for a few years, as we get rid of all the foreclosures and consider the tough underwriting processes.
The National Association of Realtors forecast U.S. existing home sales to rise about 9% nationally, this year and the median price to lift 5%, on the heel of a 9.5% year over year increase. That means, the rise in median or midpoint price, can reflect either appreciation or change in the mix of sales toward higher priced properties and less forclosures. A recent poll taken by Zillow found consensus expectaions for about 2.3 % price increase, a big rise from the flat early quarters of 2012. However, 113 economists surveyed have various opinions of the housing markets for 2013- anywhere from 2.5% to 9.2%, averaging 3.9% in 2013 and 5% in 2014. Average time to recoup the losses from the housing bubble to be 12 years. Comparing perspectives into a normal time period of housing, from 1987- 2000, when the annual rise in housing prices would have been rise 3.6 % across 10 big cities. In todays stablizing housing environment, adjusted for inflation that would be 2.6% increase in value.
What could change the positive scenario? Additional regulations, foreclosures, boucing interest rates, and uncertainity with a divided government. Several well know housing economists(Karl Case, Robert Shiller,Anne Thompson,David Blitzer) have concluded while the recovery is plausible”we don not see any unambiguous indication in our data of a sharp upward turning point for demand in housing that some in the media have suggested.” Location is a key factor, Phoenix, sun belt,or Miami may trend upward with appreciation, with Tucson or smaller cities lagging a little behind a bigger city with similar location.
Bottom line be careful, it is a good time to buy, but realize appreciation may not be rapid. Buy and plan to stay, build equity and enjoy your purchase ,go back to old fashion values of ownership and pride. Be happy to own a home and pay down debit to build equity, not thinking of your house in trems of Money – as a open check book.
Most important point to make at this time, chose your realtor carefully make sure they know HOW much you can spend, do your buying homework, ask an appraiser to value the property if you are paying cash.
Don’t rush to buy, interest rates are slightly higher as I write this(Jan 2013), they will come back down(I hope) over the next couple weeks. Good luck!