For quite some time, Netter Real Estate has been spreading the word that today’s real estate market is truly historic in that prices are reasonable simultaneously with interest rates being incredibly low. This creates enhanced buying power of the purchaser. Netter Real Estate agents have hosted incredibly busy open houses, have been received a high volume of calls from folks who are ready, willing and able to buy now, and in several cases, buyers have made competing offers on properties, which is terrific news for sellers.
But nothing lasts forever and nowhere is that more true than in the real estate market. By nature, the real estate market is cyclical and there are signs that change to today’s market is on the horizon. Nobody knows for certain what tomorrow will bring but Netter Real Estate has been in business since 1949 and experienced every type of market. That level of experience paired with keeping apprised of any and all news about the economy at large and real estate in particular gives us the confidence to give you our opinion.
Netter Real Estate and our friends at KCM share the belief that sellers have a window of opportunity for the next 90-120 days in most parts of the country in which to sell their homes for maximum price. We believe there will be increased downward pressure on home prices throughout the rest of the year.
Why renewed downward pressure?
Any item’s price is determined by ‘supply and demand’. In many parts of the country, existing housing inventory has dropped to historic norms in the last few months. However, an inventory of distressed properties (foreclosures and short sales) will be coming to market this year. This inventory has been delayed for over a year as the Federal and state governments crafted an agreement with the five largest banks and mortgage servicers to establish a roadmap for how a foreclosure must be properly completed. That agreement, the National Mortgage Settlement, was reached two weeks ago.
What Impact Will the Agreement Have on Foreclosures?
Brandon Moore, chief executive of RealtyTrac, explains:
“The settlement sets forth clear guidelines for lenders and servicers to follow when foreclosing, which should allow them to push through some of the delayed foreclosures from last year.”
How Many Foreclosures Could We Be Talking About?
Mark Vitner, a senior economist at Wells Fargo Securities tells us:
“The settlement helps the housing market in the long run because it allows banks to proceed with millions of foreclosures that have been stalled.”
What will this mean to home prices?
As this inventory comes to market, it will impact prices in two ways:
- It will bring to market discounted competition for buyers
- It will impact the appraisal values of all homes in the area
Which States Will Be Impacted the Most?
The states that have the largest backlog of properties currently in the foreclosure process will be the states that will see the greatest price depreciation.
There is a window of opportunity currently which sellers should take advantage of. Waiting until later this year will not guarantee a higher sales price. If anything, in many regions of the country, it probably guarantees the exact opposite.
If you are considering selling your house, please turn to Netter Real Estate for a no cost, no obligation Comparative Market Analysis to assess your property’s current value. Our agents at Netter Real Estate will give you an honest and accurate professional opinion of current market value so you can make an informed decision about what you should do with your property.
Please check our website regularly for Netter Real Estate happenings and be sure to “like” the Netter Real Estate fan page on Facebook for up-to-the-minute information on what’s going on in our community.
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