By Phoebe Chongchua
In the first quarter of 2013, our economy grew by 2.5 percent. While some were disappointed with that figure because it fell short of the consensus estimate of 3.0 percent, it's still a sign of better times, according to Corelogic.com.
The company recently released “The MarketPulse,” which highlighted the following: economic recovery is benefiting from residential investment, “census division of price declines in the housing collapse varied dramatically by depth and duration, and the census divisions with the largest declines have the fastest current recoveries.”
There are four census divisions in the United States. These geographical regions contain two or three census divisions for a total of nine. How these areas were impacted and how they are recovering depends on various factors such as the development of new housing.
Build it and they will come. The new housing industry is growing stronger and helping boost the Gross Domestic Product (GDP). Homebuyers seeking new homes are encouraging this growth. At the lowest point, new home sales dropped to 273,000 annualized sales in February 2011, marking the lowest sales rate in almost 50 years. The highest peak reached 1.4 million annualized sales in July 2005 and today it's increasing 19 percent from a year ago, according to the U.S. Census Bureau data from March 2013.
Meanwhile, residential home prices are continuing to rise. However, the increase in home prices isn’t uniform across the country. Instead, the recovery is geographically confined to areas that are “either recovering from the boom-bust cycle, or exhibiting strong economic fundamentals and strengthening demographic demand,” according to Corelogic.
The increase in housing prices is also happening in areas where building is booming.
New housing competes with foreclosures and short sales. These latter two groups are now experiencing a decline, making new housing a good solution for some buyers.
Mortgages categorized as seriously delinquent (90 days or more past due) peaked nationally at 3.7 million in January 2010. The figure has recently dropped by 33 percent to 1.2 million.
Corelogic reported that there were 55,000 completed foreclosures through March 2013, which is a decrease of 16 percent compared with the number of the same period last year.
Meanwhile, the summer sizzle season is arriving soon and analysts expect another possible increase in sales and prices which could encourage more sellers to list their homes for sale.
If you’re interested in buying, here are a few tips. Act now. Start putting your finances in order so you know what you can actually afford to purchase. Delaying this could mean the loss of your favorite home to a better prepared borrower.
Meet with experts to get the best information and advice about the real estate market you’re interested in. While real estate information is available on line from anywhere in the world, prices vary greatly depending on the local market. Your best bet is to find an expert in the area you’re interested in to assist you with your questions and guide you through your search.
Remember that many sellers are still in a recovery mode. They may just now be adjusting to no longer having their home mortgage “under water.” So, when you find a home you’re interested in, act quickly to engage negotiation about the final sales price.
Also, keep in mind that the housing inventory is likely to increase as housing prices continue to rise. However, many experts predict the shortage of existing homes for sale is likely to remain a problem throughout the rest of 2013.
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