All that said, we are now entering the busy selling season.
C&P Home Price Index
Nation-wide, home prices are improving by leaps and bounds year-over-year, according to the new January Case-Shiller Home Price survey.
Year-over-year, the 10-city Home Prices Index rose 7.3%, while the 20-city index rose 8.1% (economists had forecast an 8.2% rise). Phoenix led the nation with home prices rising 23.3% alongside its sharp drop in the unemployment rate.
Los Angeles home prices rose 12.1% in the last year, and 1% month-over-month.
All of these numbers are part of a larger trend that saw home price gains in all 20 metros for the first time in over two years.
Is it safe to sell your house now?
It's been seven years since the start of the housing market collapse, but finally things are starting to look up. Mortgage rates remain at record lows, new home construction is starting to go up, and home values are improving.
So if you're looking to sell your home, is now the right time?
A new survey by Fannie Mae reveals nearly one in four homeowners are confident that now is a good time to sell, a number which is up 11% from a year ago. And even though home values are improving, they are still 27% below 2006 highs.
If you're thinking about selling, give me a call. I can help you determine if it's the right time and what is the right price.
California and especially Southern California real estate numbers have been largely affected by low inventory, with Los Angeles seeing a whopping 60% fall from 2010 inventory numbers. The high demand (we are seeing multiple bids on properties in areas like Echo Park) and lower inventory is bringing up home prices – good for homeowners needing to sell, not as good for those looking for the lower-priced deals. Strangely enough, the modest increase in sales we have seen does not appear to match up with the significant drop in inventory (meaning a home sold means a home no longer for sale), however investor money and low down-payment buyers are the ones buying, according to DoctorHousingBubble.com.
los-angeles-inventory
home-values-concept
Zillow’s most recent Home Value Index report indicated home values in the country rose 5.9% in 2012 from the previous year, and the best annual gain since 2006.
In the fourth quarter, home values rose 2.5% from the third quarter, up to a $157,400 average. Of the largest metros surveyed, 69% saw annual home value gains last year. Foreclosure activity also declined, dropping 12% from 16% at the end of 2011.
Even with the positive gains in home values last year, the new year is anticipated to see a more sustainable 3.3% appreciation rate, which Zillow sees as being more tempered.
Based on these numbers, Zillow projects a 3.3% rise in home values for 2013, a rise that will bring us up to the norm.
Foreclosure Inventory via Wall Street Journal
With gains in housing prices the past year also comes an increase in home equity – very good news for current homeowners. But while those shopping for good deals (especially first-time home buyers and move-up buyers) are getting incredibly low interest rates, foreclosures and other REO inventory is shrinking drastically.
According to CoreLogic, foreclosure inventory is down 20% in November from a year ago. REOs fell from 19.6% to 11.5% between January and November 2012. This drop is due to a lower number of delinquencies and a more laborious foreclosure process that resulted from the original housing crisis issues.
Along with fewer foreclosures and REOs comes major competition to purchase deals by investors, first-time homebuyers, and the move-up buyers, hence the rise in prices. Economists are predicting that 2013 will see further declines in both REO and foreclosure inventory, but won’t be as steep a decline as we saw in 2012.
lsenomicsHomePriceExpectationsbySurvey092012
A survey conducted on behalf of Zillow in August and September has found that the majority of economists in the survey are increasingly optimistic that home prices will continue to rise steadily over the next four years.
From Realtor Magazine: “The economists surveyed expect home prices to rise 2.3 percent this year over the fourth-quarter of 2011, according to the survey conducted on behalf of Zillow. In 2013, they expect prices to rise 4.7 percent; 8 percent in 2014; 11.4 percent in 2015; and 15.2 percent in 2016.”
The survey also reveals that more than half favor the elimination of mortgage interest tax deduction.
The optimism is a very good sign that we’re on the road to recovery. Stan Humphries, Zillow's chief economist, says "It's refreshing to see this optimism at a time when the market seems to be making an organic recovery, in the absence of an artificial stimulant like the tax credits."
