5 Signs to Watch for Housing in 2013

I just read a great summary of factors impacting our national market. I've summarized the CNN Money Article article with observations for our local market. 

# 1 - Buying Gets Less Affordable

The bust of the housing market five years ago created one of the cheapest times to buy. Across many parts of the U.S., even in some of the priciest markets including New York and Honolulu, it has become cheaper to purchase a home than rent, according to Trulia's Rent vs Buy report. Record-low interest rates on mortgages have also made buying more affordable.
That's changing, however. In 2012, prices hit bottom. Finally! While that tells us the market is healing, it could also mean buying will be less affordable in 2013. Asking prices for homes for sale rose 3.8% in November from a year earlier -- one of the biggest gains since the housing market crashed in 2007. While rents nationwide are still rising faster than home prices, the trend has reversed in 14 of Trulia's 25 biggest rental markets including Denver, Seattle and San Francisco.
My Local Observations
  • No question it's one of the cheapest times to buy. 
  • Buying cheaper has been helped by record low interest rates
  • I have seen some prices rising in specific situations but overall values remain have steady over the last 12 months.
  • Inventory remains at low levels. If this continues it will push prices. 
  • Reporting of average price increases can be misleading since the number is a combination of sales in all price ranges. In a year where more homes in a higher price category sell, the average will increase but does not necessarily indicate all home values categories have risen. Closer analysis is needed. 
  • The market is healing. Ultimately that will lead to higher prices which will lower affordability. Solution - buy now if you can! 


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