How Much House Can You Afford?
Looking ahead these Real Estate trends will be here for a while. Find out what types of Real Estate investing is on the forefront of buyer's minds and pocket books!
1. Housing recovery: unlikely, however cautious optimism remains. A few more foreclosures have yet to flush through the market(s).
2. Mc Mansions are out: compact housing is it. Baby boomers are downsizing to more manageable homes. Generation "x'' is interested in vibrant, walkable neighborhoods, smaller compact homes. Smaller homes with more pizzazz..
3. Home buyers are thinking long-term: 1st time homebuyers are now thinking a decade in advance. Repeat buyers 15 years in advance. Homeowners are simply planning on staying longer.
4. Prices still have further to drop: 7-10% Increase in foreclosures. The 500,000 plus market (larger older homes) and conditionally and location challenged unsold properties will still need to adjust price or condition or both in order to sell. Price competitively or price it to compel a buyer to choose your property over the gazillion other choices they may have.
5. More foreclosure to come: still shaking out the over bought/over extended homeowners from the boom of 2005-07. Some homeowners that bought in 2005-07 now need to sell/move for one reason or another. Some can't afford to move because their mortgages are worth more than what the market will bear for their home and that leads to more foreclosures.
6. Mortgage rates to remain low: Long-term rates will begin to rise mid to late 2012. Rates will eventually have to go up in order for governments to begin to recover their own debt loads.
7. Mortgage Rules/Standards taking on new shape: Shorter amortization periods: no more 50 year mortgages, now down to 25 year mortgages as the norm. Increase minimum downs: more and more lenders are tightening their purse strings and will be requiring more money for down payments in order to secure financing. Longer probation periods: stricter qualifying standards over all, especially the self- employed.
8. New Construction concerns: lower new construction starts in this market (2011) could lead to a housing shortage in the future.
9. Investor opportunity: CASH investors will rock especially for bank /foreclosure sales.
10. Housing recovery dependent on employment rate: housing recovery maybe delayed due to in part of current employment rate.
Although not written in stone the above Real Estate Trends for 2012 are a guideline as to the direction the market is headed. Smaller homes, tighter financing regulations, and a few more foreclosures to get through are all what we can generally expect to see in the near future. But always remember: a good home well located, presented and priced will sell in any market!
Jennifer Kennedy is Broker Owner of Kennedy Real Estate, Edmonton Alberta. Jennifer has 10 years experience working in residential sales negotiating through boom and bust times. Staying on top of Real Estate trends gives Jennifer an edge when advising her clients in their Real Estate decisions.