|
I thought I'd drop a line with a brief update on the housing market today. In my view the market continues to become more of a "normal" market, which I welcome.
Buying
Trends continue as they have all this year, with an optimistic outloook for 2014. Home builders and consumers look at the year with increased confidence. There's no denying the pent-up demand from potential buyers, tempered both by constraints on getting a loan and rising values of homes for sale. Cash remains king.
Investors have pulled back from their buying spree as distressed property inventory has diminished and as home values have risen, leaving the field clear for ordinary people. Investment continues in rental properties and rents continue to rise across the country. The incentive to stop renting and buy a home gets stronger every month and with each lease-renewal for those with income or equity. Loans remain stringent.
Lending
Part of the restoration of a more normal market includes the disappearance of those "creative" loans that fueled the engine of the housing bubble. We are far from a "no money down" world, and leveraged buying is gone.
People seeking mortgages now gain them solely on their financial fundamentals, and buyers with existing equity and cash to add to a deal have the best options to re-size or relocate.
More than 95 percent of mortgage originations today are fixed rate, according to Black Knight Financial Services (only 65 percent were in 2006).
Homes
Inventory remains in short supply, but this alone is no longer the force it was last year to push prices upward. In place of dramatic movements, a stable buoyancy pervades the market.
Ordinary individuals are in the market now, with the usual ordinary reasons for being here: relocation, downsizing, trading up, adding a second home, launching their children as homeowners, and such.
Homebuyers and sellers operate in a more rigorous market now, needing to match asset strength against desire in a very realistic calculation. Some would call this financial sanity, and I would agree.
Spring season is starting, but I've been madly busy since last Christmas, with no let-up in sight. People seem to be seizing this year to make their next move.
And so we carry on 
Talk soon!
|
