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Real Estate Trends: Will Market See the Same Growth as the Rest of the Nation?
Today I wanted to talk to you about some of the top trends we are seeing in real estate. In the past few years, the trends in our industry have been quite unpredictable. In one year we see high foreclosure rates and in the next, we see low inventory. This makes it hard to tell where the market is headed next! However, this year we have found a few figures that everyone can agree upon! Some of them may even shock you. If you’re thinking about buying your first home or even your second, 2014 may be the year for you!
If you did not know, changes to Dodd-Frank have taken effect on January 10th. This has changed the debt-to-income ratio lending limit to 43% to prevent another housing collapse. You will also notice that lenders have to pay closer attention to your living expenses which equals your debt-to-income ratio. This makes sense! Borrowers simply want to ensure that they are putting you in a mortgage that you can afford. However, this will rarely be an issue locally; I have been seeing many more people conservatively saving their money to avoid coming close to the new debt-to-income limit. This bringing strong financial stability to our area!
We have also seen Realtor.com performing their Top Turnaround Town report that is crunching numbers including the average list price nationwide and the average days spent on market. The results of this data have shown that cities hit hard by foreclosures or very high inventory have been strengthening. In our own Huntsville area market, we are seeing a steady trend on pricing and days on market. We don’t see the tracking showing much of a high or low point yet, but we have seen ten multiple offer situations in the past week! This is indicating a very quick turnaround for our Madison-Huntsville market that will give us the feel of an early spring. With the strong economic forces that are affecting our area, now is the time to buy!
The next issues that are hitting large markets, like New York and San Francisco, are affordability and a drop in housing. These cities are seeing average sale prices in the mid to upper six-figures. The National Association of Realtors Home Affordability Index found that home affordability dropped to a five year low in 2013 as increase in home pricing outpaced income growth. Don’t cut out the foreclosures! You will notice that there are less home owners that are losing their homes due to the economic recovery. Short sales are also nowhere to be found!
If you’re looking for a second home, the real estate market particularly in Florida and Nevada are seeing more inventory but with listing prices well below the national average. This is perfect if you have dreamed of owning a vacation home but were worried about affordability. However, places like Ft. Lauderdale have seen price increases of 30% in the past year yet still remain below the national median list price. This means that demand is continuing to rise but most sellers have not taken advantage of the increase. Cities like Miami, Phoenix and Las Vegas are seeing similar trends.
Remember, we have connections to top agents across the nation! This is positive sign for the entire nation and a very positive sign for us locally. If you have any questions regarding the real estate market, don’t hesitate to reach out to us. Thanks and have a great day!