Minneapolis, Minnesota (PRWEB) January 25, 2013
Fannie Mae's housing specialists released their first economic forecast of real estate trends in 2013, introducing their "Transition to Normal" theme for 2013 that added to housing's sentiment that 2013 stands a fair chance to be even stronger for the real estate industry. According to Fannie Mae, "the housing sector, which has become a bright spot in the economy since home prices began to rebound in 2012, is expected to provide a rising contribution to GDP in 2013 and in coming years".
In an article titled "Few economists predicted housing market rebound in 2012" posted on January 22 by HousingWire and a Wall Street Journal article from the same day titled "The Year Everyone Was Wrong (Again) About Home Prices", 2012 is celebrated for the magnitude of the rebound that the housing sector enjoyed.
Jenna Thuening, owner of Home Destination, is positive about Minneapolis housing trends: "The solid momentum behind home building increases, the surge in existing home sales, new foreclosure rules to protect homeowners, and remodeling contractor sentiment all point to a solid start to the new year for home improvement spending.”
Fannie Mae's housing specialists released their first economic forecast of 2013 and introduced their "Transition to Normal" theme for 2013.
“We’re in the early stages of what we think is a long- term, multi-year recovery in housing,” said Philip Orlando, chief equity market strategist at Federated Investors Inc., offering his take on real estate trends for 2013. “You have a tremendous amount of catch-up that’s going to drive the next five or 10 years. But we’re finally seeing evidence that housing has stopped being a drag and can actually start to become additive to GDP growth.” Homeowners that have sat on the fence are ready to buy that bigger home since they can gain so much per dollar and let the home's value accrue. 75.1 % of your local community have some form of a move-up buyer. This trend started in 2012 and is expected to be even higher in 2013.
After reaching record lows in 2012, mortgage rates are expected to creep up slowly in 2013, the Mortgage Bankers Association is predicting.
Home Destination's take away points from yesterday's HousingWire live webinar event "Projected Percentage of Change In Home Prices in 2013" per each predictor below:
Today: a 360,000 home price at a 3.4 rate will have a P&I of $1,596.53
End of Year: a home with a 371,000 price at a 4.4 rate will have a P&I of $1,858.62.
Monthly Savings: buying a home today will have a monthly savings of $262.09, equaling 94,000 dollars in the long term.
If one was to take a median forecast of more than 100 housing economists and analysts predicted in this past December’s survey that home prices will increase this year, it tallies to a 3% gain in 2013. The median forecast also calls for home prices to rise nationally by 23% through 2017. Even the most favorable respondent in last year's 2011 survey may have underestimated the final 2012 home price gain. A full report will be tabulated and released by Standard & Poor’s late February.
According to HousingWire, bidding wars are brought on by the lack of inventory. However, appraisers and banks cannot come in were a bidding war may take it. They can drive the asking price of a home above the home's value and force the seller to come down in their asking price. The new lending rules meant to help homeowners avoid loan delinquencies are a great protection homeowners were missing prior to the home price collapse. According to Jenna, "It was in fact a contributing piece to the housing bubble". Appraisers are starting to lean more towards "Income to Value" methods vs. "Market Approach".
Appraisals are more prevalent than BPOs in an appreciating housing market. BPOs are more prevalent in an depreciating housing market. "It is important to bear in mind that BPOs are much cheaper than an appraisal is. The home appraisal process was refined in 2012, adding several rules to mortgage lending to protect both the home borrower and the lender from a risky home loan," says Thuening.
Home Destination, a Minneapolis Certified Distressed Property Expert and residential Realtor, guides perspective home buyers and sellers in the Minneapolis housing market and St Paul area real estate decisions. Call 612-396-7832.