Housing Bust - Is the End Finally Here?

End of California Market CrashThe housing market has been in, for lack of a better word, a free-fall since late 2006. ┬áMany people predicted this would pass quickly, as we all “know” housing prices have to go up. Since then, we have learned just how wrong those people were. News and indicators are finally starting to signify that we may finally be at the end. No one can know for sure, and the buyers in the market, as well as the greater whole of the global economy will ultimately decide the fate of the housing market, but I think we have reached the bottom. We are in a prime position to start seeing home prices increase.

Here are some of the reasons I think we are ready to get the housing market improving again:

  • Jobs are improving. In January 2012, we saw unemployment levels reach 3 year lows. National unemployment is now at 8.3% and has improved each of the last 5 months
  • Interest rates on 30 year fixed mortgages actually rose. After sitting at historical lows for the past 3 weeks, the average rate on a 30 year fixed mortgage rose to 3.95% this week. This rate is still incredibly low, so it’s perfect for home buyers, but an increase in rates could signify the end of these historical lows. Capitalize now.
  • Stocks of companies in the housing industry and related industries are rising. Companies that build houses have seen their stocks rise since October 2011 by more than 60%. Home Depot reported a huge net income growth of 32% for the quarter ending 1/29/2012 on categories such as building materials, lighting and flooring; indicating that home owners are making improvements to their homes.

If we have learned anything from this housing bust, it is that it’s virtually impossible to predict what will happen in the housing market. However, you can follow indicators such as those above to make educated predictions.

I think now is the time to start searching, try to buy before the peak selling season hits in the spring. Contact us now if you’re considering entering the market.

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