Real Estate Forecast for 2013 Here is my view of what will be happening in the Atlanta Real Estate market in the coming year. Some of the information is from other articles and some is from my observation and experience.
Prediction #1 is the same as last year. There will be a slow and steady recovery in 2013. The tortoise will move a little faster this year than it did last year. Forbes says ” The housing market will improve moderately in 2013, but nobody will mistake this for a boom.” It’s a great time to buy more investment properties!
More 1st time buyers will be back in the market. With interest rates at historic lows, buyers are realizing that owning is cheaper than renting. They are also realizing that rates and home prices won’t be this low long term. This should help the first time buyer price points which have been slow in 2012
Baby Boomers will not give up certain features. While a lot of us are interested in downsizing, we still love some of the large home features. A survey released by home builder Pulte Homes recently said that preferences among consumers shows that buyers want more open space and more storage.
15 is the NEW 30! The Wall Street Journal says that the 15 year mortgage is no longer a fringe player but riding a wave of popularity. Fixed rates on 15 year mortgages average 2.81% , down from 3.36% a year ago according to mortgage website HSH.com. In the past, refinancing from a 30 yr to a 15 yr mortgage usually meant ending up with a bigger monthly payment in exchange for a slightly lower rate. In today’s market, the lower rate can allow the borrower to make the switch without the payment increasing too much; and the allure of paying off a home quicker is very attractive..
Appraisals may continue to be challenging, especially on rural, historic, or unique properties. I’ve had several conversations with past clients attempting to refinance their historic homes, or homes on acreage. Lenders can no longer select their own appraisers, it must be an arm’s length transaction. They are bound by rules that force them to match the value to the last comparable sales and within a certain geographic limit. Where there have been no comparable sales or one or two distressed homes have sold, the appraisal value can be way off. Homes within stable subdivisions and higher volume sales areas are not having these same issues.
Lending Requirements will still be strict. Unless you apply for an FHA loan ( around 3.5% down)future of fut, Zip Realty predicts that traditional lenders will still require full documentation of income for at least two years, excellent credit, and a strong preference for 20% down. There was a fund set aside in Feb 2012 for loan modification for homeowners who are having financial difficulty.
Banks will favor short sales over foreclosures. The joke in Real Estate in 2012 was that short sales are really long sales (only it’s not funny to all those involved in one.) Banks are realizing that they can cut their loses when choosing a short sale over a foreclosure. In 2013, banks will do a much needed streamlining of the short sale process. If you or someone you know is facing a short sale, please call me for the in’s and out’s. The Mortgage Debt Relief act (forgiving all federal and state taxes due on a realized loss of a principal residence) has been extended to 12/31/2013!
Supply and Demand. As the housing inventory starts to shift to fewer homes for sale, the local market will pick up more demand. However, it’s all LOCAL. Some zip codes have seen good growth. A great place to check your area by city or zip is www.trulia.com.