As more communities shift to a sellers-driven market this spring, buyers, sellers, and renters are considering their position in the housing market.
Many sellers in the early spring market are now emboldened by multiple offers and more expedited sales; buyers, frustrated with lack of inventory, may consider putting off purchasing, while renters could decide to sit on the fence. I take pride in the expert advice and guidance my firm and I provide to our clients in any market condition.
It is safe to say that we have passed the bottom of the market. On a national level The S&P Case Shiller Indices 20 city and 10 city composites continue to rise. Locally, Boston is up not only on the month-to-month change, but is enjoying a 3.55 percent increase year-over-year. This means homes are starting to appreciate in value, and as the values rise, the buying public could be boxed out of specific price ranges.
With the housing recovery gaining steam, if you are thinking about selling or buying, now is the time. People who were looking to play the bottom of the market have missed it. One needs to analyze the opportunities that are available now and make decisions. Buying an appreciating asset is a far better investment than buying a deprecating one.
I am advising buyers concerned with a lack of inventory and frustrated with multiple offer theater to hang in there. Waiting to buy in the fall could result in paying almost 1 percent more than what you would pay now. Renters who are hesitant to start the buying process should also think about how much housing prices will increase when their lease is up. If you can pull together the funds there is no time like the present to get into the game.
As we get deeper into the sellers driven market, the lending community will have to make changes in order to sustain the recovery. If rates start to creep up, the amount required for deposit will have to drop in order to compensate. Currently, in order to avoid paying Private Mortgage Insurance (PMI) you need to put 20 percent down. As rates start to rise, and I believe long term they will, banks need to lessen the amount required for a down payment. For the recovery to maintain steam, the lending community will have to keep pace; based on previous markets, I believe we will need to see these changes going forward subject to one revision; banks must make it their priority to appraise accurately.