Five Housing Trends For The Remainder of 2013 in Portland OR

Home sellers and buyers are finally speaking the same language. The gap seems to have closed between what home owners want for their homes and what buyers are willing to pay. Homes have been selling quickly, and home buyers will continue to face competition, even as more homes are expected to hit the market.

Five Housing Trends For The Rest of 2013

Five Housing Trends For The Remainder Of 2013

Home sellers and buyers are finally speaking the same language. The gap seems to have closed between what home owners want for their homes and what buyers are willing to pay. Homes have been selling quickly, and home buyers will continue to face competition, even as more homes are expected to hit the market.

Five Housing Trends For The Rest of 2013

That doesn't mean home sellers can price their homes based on what they paid during the housing boom. Despite recent increases, home prices remain well below than where they were a few years ago. It remains to be seen if the housing recovery will lose traction as mortgage rates increase. For now, homeowners have not felt the impact of higher interest rates as much as refinancers. But they may.

Here Are 5 Housing Trends For The Coming Months

  1. Homes Sell Quickly With No Discounts - Forget the days when home buyers could make lowball offers on homes, sit back and wait for desperate sellers to cave. In most parts of the country, homes are selling quickly, and near or above the listed price. On average, homes are selling for 99 percent of the listing price. In some of those markets - including San Francisco, Seattle and Washington, DC -- homes have been selling at or above the listing price.

    In many markets, sellers are inking deals within a week after listing their properties. It's a pretty good time to be thinking about selling and a competitive time to be a buyer. As the summer home buying season heats up, buyers will continue to encounter bidding wars on homes. Prices will likely rise as a result. But if you are on the market for a home, there's no need to panic. Home prices have a way to go before they skyrocket to the levels seen during the housing boom. Prices are up, but they are not up that much relative to where they once were.

  2. More Homes Hit The Market, But Not Enough - Buyers are facing fierce competition when searching for a home. That's mainly because the number of homes for sale has shrunk significantly compared to last year. The situation may improve this summer. As home prices climb and more home owners start to regain equity, home sellers who had been sitting on the sidelines will be more likely to list their homes for sale.

    We are starting to see more homes come on the market. The total number of homes for sale in the US increased by 5.82% compared to the previous month. Despite having more options, home buyers will still encounter competitive bidding this summer. Even though more homes are on the market, demand is picking up to keep up with supply. Does that mean homeowners can overprice their homes and expect homebuyers to fight for them? Not really. You must have reasonable expectations - if you are willing to price your house at the right price, you are going to sell it quickly.

  3. Mortgage Rates Rise Test Housing Market Strength - Record low rates have become part of history. As the Federal Reserve prepares to trim its bond purchase program, rates head up, and they are unlikely to return to the low levels seen earlier this year. A strengthening US economy and improvements in the labor market have helped put upward pressure on rates. It remains to be seen how long this pressure will last.

    For those who have missed the boat on refinancing their loans, there's still hope that global economic concerns may put some downward pressure on rates in the near future. On the overall economic landscape the US is getting stronger economically every day, but outside forces in Europe and the economic slowdown in Asia may creep up on our economy. For now, say goodbye to rates in the 3% range and get used to rates in the 4% range, which is still historically low.

  4. Something Other Than The Standard 30-Year Fixed Mortgage - As mortgage rates rise, shorter-term adjustable-rate mortgages may become more attractive to some home buyers and refinancers. An increasing numbers of borrowers are looking into loans with lower rates, such as the 15-year fixed mortgage, whose rate has generally been about 0.75% lower than the 30-year fixed as well as adjustable-rate mortgages, in which the rates resets in 7-10 years (7/1 ARM and 10/1 ARM). Introductory rates on these ARMs tend to be even lower than the rates on the 15-year fixed.

    Popular during the housing boom, ARMs accounted for 65 of loans originated in last month, that's up slightly from 4% the mont previous. People are turning more frequently to that type of mortgage product. Not the two-year ARMs which were a popular subprime loan during the boom and contributed to the crash of the market. More often these buyers are selecting five-, seven- or even ten-year ARMs. Especially for younger people who are just looking to buy a a starter home. These mortgage options allow first-time buyers to keep monthly debt service down because of lower mortgage payments.

  5. Fewer Refinancers In The Market - When mortgage rates were near bottom, refinancing made sense even to home owners who already had refinanced in the previous year or two. But as rates rise, many potential refinancers will lose their opportunity to reduce their mortgage payments this summer. About 75% of mortgage applications during the first three months of the year came from refinancers.

    The share of refinances is expected to drop to less than 50% in coming months as rates rise, according to the latest forecast. If it still makes financial sense for you to refinance now - especially if you have a mortgage carrying a rate of 6% or 7% - many brokers are recommending you don't wait another minute. If it makes sense to refinance, why wait? Rates are not as low as they used to be, but they are still low.