For the past few months the nation has been hearing how the market is stabilizing. In fact, articles on evidence for the steadiness of the economy have become almost redundant. We get it. Unemployment rates are lower than they’ve been in years; businesses are once again growing and being created; the stock market (despite its occasional, but predictable vacillations) is growing slowly and steadily; and jobs are being created. Hurray, the economy has been saved. Life in the Brazos Valley can go back to what it once was. But there remains one minor question to be answered: when are we going to start seeing that reality reflect in the real estate industry?
The reality is that the unexpected plunge of real estate in Florida around 2009 sparked a nationwide real estate crisis. This, in turn, was one of the major flames to ignite our nation’s most recent recession. So it would appear only appropriate that the real estate industry suffer long after the recovery of every other aspect of our nation’s economy. The cause of our recession’s drought would inherently outlast the seemingly stable, progressing aspects of our pre-recession economy. Therefore, despite the various other regions of America’s economy now flourishing and returning to full vigilance, the market for selling and buying homes is supposed to linger in the arid economic desert until all signs of a healthy economy have been brought to light.
Which brings us to our next question: how much longer until the real estate market stabilizes as well? The answer, to the great enthrallment of homeowners still squatting in a vacant market, is not much longer. In fact, we might not have to wait at all. The economy is healthy, banks are recovering, jobs have been made, and homes are once more looking to be purchased.
Actually, little statistical evidence shows that the housing market is back on track. But for those hoping to get a head start, that doesn’t quite matter. Instead, the significant change has been the mood of potential buyers and sellers. That’s right: the attitude toward the housing market is changing, which is all the foreshadowing necessary to predict an upswing in the market for real estate. Think for a moment: with the economy stabilizing and the nations markets growing once more, people are anticipating that the housing market is going to bounce back as well. And rightly so. It’s a fact that it will only be a matter of time before the real estate industry recovers, and for potential home buyers looking to get the best deal on a selling home, now is the last chance to buy cheap.
But this isn’t just the biased perspective of a real estate blogger throwing out ideas. The Vice President and Chief Economist of Fannie Mae, Doug Duncan, claims that “conditions are coming together to encourage people to want to buy homes.” Duncan’s speculation comes from his understanding that “Americans’ rental price expectations for the next year continue to rise, reaching their record high level.” From these projections, Duncan predicts that some of America’s home renters might find home ownership as a more compelling option due to the rising rent prices.
Fannie Mae conducts a real estate survey every month, and the vibe emanating from the respondents are suggesting some interesting things. To start, the percent of respondents who think that it is a good time to buy has reach a high of 73%. To accompany this compelling statistic, the number of respondents who claimed it is a good time to sell also rose. This coupling suggests the market is ready to expand, as buyers and sellers come closer to reaching an agreement on the negotiated and offered prices. With more people looking to sell and more looking to buy, the market automatically grows. From there it’s only a matter of processing statistics to show that home sales are finally recovering.
Perhaps the dramatic increase of respondents looking to buy is an effect of projected rising home sales. In fact, regarding respondents’ expectations of home price increases over the next twelve months, the highest amount of respondents from this entire year claimed home prices would climb. Also, coinciding with Vice President Doug Duncan’s understanding, almost 50% of respondents are anticipating rental prices to go up.
For further encouragement regarding the real estate market, 66% of the respondents of Fannie Mae’s survey claimed that, if they were to move within the next year, they would buy a home. This is a strikingly encouraging prospect (assuming the opinions of Fannie Mae’s respondents are reflective of the overall population), and owners with homes on the market can certainly look forward to a steadily growing pool of potential home buyers.
All in all, Fannie Mae’s survey shows us not that the market for home real estate is already recovering, but rather that the opinions and attitudes of the public are gradually shifting in the favor of the real estate market. Rising renting costs are causing people to shift their interest back to home ownership. Low prices for homes, likely only to rise over the next years, are also encouraging prospects for potential home buyers. And the overall stabilization of the economy is assuring potential home owners that the value of their purchase will not plummet the moment after they purchase their new home. So while the statistics are showing very little in the means of a growing market for the real estate industry, it is clear that America is ready to trust home ownership once more. And because of this, the market for real estate will begin steadily restoring itself.
PS – Susan Hilton is Bryan College Station, Texas’ real estate specialist in foreclosure sales and real estate agent career building so if you need help – CALL! 979-219-3970