...many of these underwater homeowners are eager to take advantage of low housing prices and low mortgage interest rates.
Chicago, IL (PRWEB) March 07, 2013
As spring 2013 leaps in, the Real Estate Housing market is taking bold steps toward a brighter, warmer future and leaving (far) behind the numerous numbing winters of our property discontent. That’s what’s in the wind according to two real estate pros and contributors to this article. Michael Hobbs and Terri Lee Ryan come armed with facts, stats and personal business experiences that not only indicate a home buying and selling thaw, but a “nice”(non-ice) recovery .
“The housing market is going with the flow, not floe,” says Michael Hobbs, President of PahRoo Appraisal & Consultancy in Chicago. He adds, “now that 2012 is behind, it's beneficial to take a look at what we left behind and what we are moving towards—not only rising home values again, but a surge in home sales, as well.” Hobbs cited recently released National Association of Realtors (NAR) statistics showing interesting and exciting trends. There were rising median home prices in ten of the past twelve months. The number of existing homes purchased by buyers was 4.65 million, up 9.2 percent from 2011, and was the highest volume increase since 2007 when 5.04 million homes were sold. And the NAR reported that as the volume increased, the inventory available for sale decreased to 4.4 months, which was down significantly from a high of 10 months in 2010.
“One factor that really added to buyers’ purchasing power was historically low mortgage rates.” Terri Lee Ryan adds. She’s a former (formidable) real estate broker, published author and online contributor to Today’s Chicago Woman with her well-followed http:// People, Places & Property blog. “Freddie Mac figures showed that mortgage interest rates in 2012 stayed below 4 percent. Thirty-year fixed-rate mortgages started the year at 3.96 percent and ended at an average of 3.35 percent,” notes Ryan.
Karl E Case has her statistical back. Case, Professor Emeritus and co-developer of Standard & Poor’s/Case-Schiller house price index says, “it wasn’t surprising that 2012 marked the end of 48 months of depression in the housing industry. Furthermore, the end of the housing depression was marked by a concurrent reduction in short sale and foreclosure transactions from approximately one in three homes to one in four homes. There is no question that we have turned what seemed to be a headwind into a tail wind,” says Mr. Case.
“For the first time in nearly half a decade,” adds Ryan, “some home owners are experiencing a nearly-forgotten, but encouraging trend of positive equity in the market—namely, their home is worth more than their mortgage.” Ryan points to data from Corelogic , the company that collects and maintains the most comprehensive property, mortgage and consumer databases in the U.S. and around the world. Says Ryan, “Coreloic estimates that only 25 percent of all Illinois homeowners are now underwater. I know from personal experience that many of these underwater homeowners are eager to take advantage of low housing prices and low mortgage interest rates. ”
Hobbs agrees not only on the basis of his years of appraisal experience, but as a real estate property and private equity investor and advisor. Says, Hobbs: “More and more sellers may consider unshackling themselves from their home and mortgage via a ‘Short Sale,’ where the property sells for less than the mortgage owned on the property.” Hobbs attributes this trend to two important factors: historically low interest rates, as well as the extension of the Mortgage Forgiveness Debt Relief Act, which exempts sellers from income tax burdens of a Short Sale. Hobbs’ sources indicate that the volume of Short Sales in Chicago is actually predicted to increase in 2013, not decrease, because sellers of underwater properties want to become buyers of attractively priced houses and lock in low interest rates.
Hobbs says that the NAR (National Association of Realtors) expects Short Sales to be “closely observed by home buyers due to the low inventory of available homes for sale, currently standing at 4.4 months, a significant decline from 10 months in 2010.” Former Broker, Terri Lee Ryan observes that a number of Chicago Realtors are complaining about the lack of inventory in certain neighborhoods, such as Lakeview and Lincoln Park, where there are not enough good properties available for prospective buyers. “The scarcity of inventory is resulting in price increases and declining days on market,” notes Ryan.
“Talk about climate change,” concludes Hobbs. “Real Estate represents a whole new, dynamic, evolving and exciting environment. It’s a great time to adapt and profit.”
Michael Hobbs, SRA, LEED GA, President of PahRoo Appraisal & Consultancy, is an expert on Real Estate Appraisal, Property Valuation, Entrepreneurship and “Business Consulting” designed to create transformational growth and profits. He is also an authority on sustainability and energy efficiency’s impact on property values. His firm is an Angie's List 2012 Super Service Award Winner and top firm for four years in a row. Mr. Hobbs can be reached at 773.388.0003.
Terri Lee Ryan is a former Chicago commercial real estate broker, marketing consultant and hotel developer. An avid writer, she is the author of Life Is One Big To-Do List. In “People, Places and Property” she dishes on leaders in real estate, new places in your neighborhood and deals being done in Chicago.