Many buyers and sellers are trying to time their sale or purchase based on whether they feel house prices may have hit the bottom or if they will fall further.

According to a recent USNews Money report, the housing market bottom may already be here. Why?

  • Some areas show homes are undervalued, and increases in prices have already been seen. I know that a house that just came on the market nearby me in Towson sold in less than a week — with a large number of showings, and possibly multiple contracts.
  • Affordability is great:  Interest rates as well as home prices have been low. Interest rates have been showing an upswing recently, so that affordability index may fall.
  • Economic Factors are improving: Consumers are spending, larger companies have more money to hire, which will bring more demand to the real estate market. The foreclosure market, which, due to the subprime lending debacle, really came to a head in 2010 due to many of those loans hitting their 5 year-ARM mark, and made those mortgages unaffordable. Though 2006 still had some of those easier lending stipulations, many foresee the worst of that wave being behind us, and credit being eased a little as banks own less inventory.

Add onto these indicating factors that the FHA annual mortgage insurance premium will rise .25% for any loans having their FHA case number assigned after April 18, 2011, and you have many buyers needing and wanting to get into houses now, before that change happens.

Economists do predict that mortgage credit will open up a little more as we hopefully get further from the foreclosure crisis, which will open the door for some buyers to return to the market. What may happen, though, is that interest rates will rise a bit, possibly keeping prices a little lower than normal.

Contact me for Baltimore County real estate market information. I can help you figure out where your home falls in the housing market!