- Residential real estate sales are 20% greater than they were a year ago
- Residential real estate inventory is 40% less than it was a year ago
- Interest rates are holding pretty stable at 3.5% for a 30-year mortgage*
Those numbers are astonishing.
Is it any wonder multiple offers are becoming the topic of the day, and rising prices are starting to be seen in real estate market conditions across the country?
The rising prices that are starting to be reflected in real estate market conditions just about everywhere are also leading to further improvements: as prices rise, and mortgage balances stay the same (or a little tiny bit lower, because of payments made), more and more distressed properties are rising “above water.” In other words, the number of properties that are underwater is shrinking — and at a pretty healthy clip. Remember that “under water” merely means that the value of the property is less than the mortgage. If the mortgage stays the same, but the value rises, less of the property is under water. When that happens, the owners’ equity increases. That’s a good thing.
One caveat, though, is that the banks are starting to ramp up the foreclosures again. They had largely put that on hold in late 2010 while the lawsuit against them was still being contested. Now that it has been settled, they — the banks — know exactly what they need to do in order to stay in the good graces of the legal system. It’s almost as if they have a checklist, and they are now proceeding to clear out the shadow inventory. Expect foreclosures to become a bigger part of the market again in the next few months as the real estate market conditions continue to evolve.*That is a nominal rate, not APR (Annual Percentage Rate), and does not take into account the factors that determine APR (points, pre-paids, etc.)
So what’s next? Take your pick.
Yeah. You should probably do at least one of those things right now.