Both buyers and sellers continue to ask how the market is doing. My experience so far this year is that I have been extremely busy working with clients getting ready to buy and sell, but although I have some sales pending I haven't been seeing a flurry of sales activity yet. I can feel it bubbling below the surface, however…I think that will change soon as buyers feel more urgency this spring because of the tax credit.
My experience so far this year was also reflected in this week's market activity report from Minneapolis Area Association of Realtors, where they reported both pending sales and new listings down slightly in January, but "not by much"…and inventory rising slightly, but "not by much".
Perhaps what stands out the most is the number of homes available for each buyer… it sits at 6.99 homes, the lowest February mark since 2006. This is good news for sellers as buyers eager to take advantage of the tax credit are getting ready for the spring buying season, which traditionally heats up after Super Bowl Sunday.
This year's buying season is expected to be skewed by three events happening this spring:
- At the end of March the Federal Reserve is expected to end a program that has kept mortgage rates low… resulting in higher interest rates
- FHA plans to tighten mortgage underwriting standards… impacting the about 30% of home buyers who use FHA financing
- The homebuyer tax credit is expected to expire the end of April… meaning buyers must have a signed purchase agreement by the end of April and close by the end of June to be eligible for the $8,000 tax credit for first-time buyers and $6,500 for repeat buyers
This seems to indicate the next few months will be a popular time to buy homes. I know open house visitors last weekend seemed to be getting ready…
Sharlene Hensrud, RE/MAX Results - Email – HomesMSP.com
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I agree Market conditions play a critical role, and it is vital that you have an understanding of not only what is happening in your metro area.
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