More Short Sales And Bank Repossessions On The Way…
We are setting on a goldmine of US and Florida real estate deals: Banks are starting to lend to homebuyers again, interest rates are at rock-bottom lows (the BankingMyWay Weekly Mortgage Rate Tracker’s 30-year national mortgage rate sits at 4.68% right now), and there are plenty of homes to choose from. If you have decent credit, you can get the housing buy of your life right now.
Pete Flint, CEO of Trulia, the real estate web site, says several
factors will lead to blow-out house prices:
1 Accelerating price drops: Home prices have already reached
their lowest level since the housing bubble burst, and are now at
2002 levels. Sellers will feel the pressure to make deals before
their homes lose even more value.
2 Bloated inventory: There are thousands of homes on the market,
more than eight months worth at the current rate of sales. Many
are distressed properties — short sales and bank repossessions.
Such homes are selling at discounts up to 50%.
3 Tight credit: Some homebuyers still can’t obtain mortgages,
4 Unemployment: While the job picture has brightened,
unemployment is still around 9%. People without jobs don’t buy
homes, obviously, but high unemployment also rattles working
people. Lacking the confidence that their jobs are secure, they
may not look to buy.
These forces could all come to a head this summer, according to
Flint, because of the cyclical nature of home buying. Buying
takes off in spring as many young families hope to make their
moves before the new school year. “By the end of the home buying season, sellers will become increasingly desperate,” said Flint