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Positive Housing Trends Set the Stage for a Solid 2013

February 4, 2013
From Loan Officer Daphne Tapp

From Loan Officer Daphne Tapp

The third quarter of 2012 had a burst of good news for negative equity homeowners.  In a nutshell, there are fewer of them…. and that trend is likely to continue in 2013!

Based on numbers from CoreLogic, there were 100,000 fewer underwater homeowners in the third quarter of 2012, when compared to the prior quarter. The positive movement is attributed to rising home prices and a somewhat limited housing inventory.

According to Clear Capital, for the year ending September 30, 2012, home prices rose 4.9%, and they are predicting a 5% increase for 2013. Other experts expect more conservative increases in the 1-2% range, but the consensus seems to be that prices will go up, and in some markets they have gone up dramatically.

In Phoenix, Arizona and Cape Coral, Florida, price increases were in the double digits last year. Other cities like San Francisco continue to see high home prices, thanks to a high concentration of residents who work in the booming technology sector.

Why are prices rising now?

One reason is that investors have been purchasing undervalued or distressed properties in the lower priced area of the market, and selling the renovated homes at a profit.  That has led to a squeeze on that inventory, driving up prices.

In addition, negative-equity homeowners have put off listing their homes for sale. They are betting that by waiting until the market rebounds more fully, they will be able to sell for a higher price.

All in all, 2013 seems to be starting off with good news – long awaited! That makes now an excellent time to determine your plan for the year so you can take advantage of these positive trends.

Source: HousingWire, Kiplinger’s, RealtyTrac

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