Home Pricing Boom

Homes are once again seeing appreciation at an accelerating rate that hasn’t been witnessed in the last six years. Giving hope to real estate owners, the banking industry and consumers, this is the largest turn around since the real estate fallout in 2006, which mimicked the Great Depression.

In January 2013, the median house growth percentage was 8.1-percent from a year prior. This is the largest gain in more than 6-1/2 years, based on housing prices in 20 major metropolitan cities. Additionally, in the winter months the housing market is always relatively slow, but this last December saw a remarkable 1-percent increase.

While the demand for housing is increasing, the number of homes on the market is actually decreasing. This helps perpetuate a solid market for sellers, with little competing demand. Low mortgage rates are also playing a key factor in the housing recovery, helping people have lower monthly payments, which can also compete with average rent costs.

Many homeowners are simply unwilling to sell their homes because they have lost equity and with banking regulations affecting contractors, in addition to foreclosures flooding the market, housing inventory has decreased. In fact, many investors have been forced to turn their excess housing inventory into rentals, as they have been faced with looming mortgage payments.

While 2013 was not anticipated to see much of a housing market recovery, experts are contributing this comeback to a strong investor demand, a growing economy, low inventories and even lower mortgage rates.

Experts predict that housing prices will actually appreciate between six- to eight-percent this year, up from the original forecast of only 4- to 6-percent. Additionally, experts anticipate that inventory shortages will continue to haunt 2013, which will help boost existing home values.

Many of the homes that are selling are not distressed properties – meaning those that are going through the short sale or foreclosure process. If the U.S. ultimately sees a 10-percent gain in home values, more than 4-million homeowners would not be upside down in their mortgages, meaning they would owe less than their homes are worth.

Phoenix has seen a remarkable market turnaround with gains of 23.2-percent. Las Vegas saw prices in January increase 15.3-percent and Atlanta saw increases of 13.4-percent.

Unfortunately, many economists are worried that if housing prices grow too rapidly, people’s incomes will keep up, meaning that we could once again face an economic crisis.

Better Than Loans specializes in hard money loans, which offers fast loan funding. As a direct lender, they specialize in financing projects from $50,000 to $25 million.