12/31/2012

Summary for Recent Real Estate Trends at end of 2012

Happy New Year for 2013 -- there are positive signs in the housing market, and we hope that they will continue!

Pending home sales continue to rise (Pending means those in escrow, scheduled to close), as shown by the Pending Homes Sales Index which rose nationally by 1.7%, and is at the highest level in the last two-and-one-half years.  Pending homes sales have risen consecutively for the last 19 months.
The November median price for a single family home in the Los Angeles Metropolitan Area rose to $327,840 from $269,440 in November, 2011!  The share of distressed sales (mostly REOs and short sales) for single family homes in the Los Angeles area has decreased to 35% from 46% one year ago.

The market is not determined just by whether the prices go up or down, there are a lot of other factors, including whether or not sellers are motivated to sell because that in turn depends on other economic factors which create the movement in housing.  Inventory is a big issue right now, no question of it.

How will the "fiscal cliff" measures affect real estate (still not resolved as of this moment)?  An unrenewed date for the Mortgage Debt Relief Act will require homeowners who went through short sales, loan modifications and other resolutions to pay taxes on forgiven debt. And will the mortgage interest tax deduction be reduced or removed? That will affect most homeowners in the country if that happens.

Will borrowers be subjected to new mortgage rules in 2013? The lending environment is already stringent, making it difficult even for some 20% down borrowers, so buyers should be aware if how conventional vs. FHA loan opportunities could work for them in the future. The topic of "qualified mortgage" rules is being examined in the coming year, and the big question is will it mean that all borrower for conventional loans be required to put down a minimum of 20%--that's a tough hill to climb.

There is some good news in the housing market now, but it will need economic support in a variety of ways to keep that going.

If you have a reason to sell, please contact me for a free evaluation of your home's value! Find properties at www.juliahuntsman.com for the latest area listings of all residential properties.

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