There's good news on the horizon for the housing market according to an article by Fortune Magazine; Real estate: It's time to buy again. Mike Castleman, founder and CEO of Metrostudy, the nation's leading provider of housing marketing information, has been analyzing data on the country's new home inventory for over thirty years.
From what he has seen from the information Metrostudy has gathered on the current new home inventory, Castleman believes that there is a significant shortage of new homes around the country and this shortage will lead to an increase of new home prices, a complete 180 from the new home surplus that contributed to lower prices just a few years ago.
In their article, Fortune magazine recognizes that there is a lot of conflicting information out there about where the housing market is headed but offers their advice about determining the true path of real estate in this country.
The article cites two basic factors that are now creating the foundation for a residential real estate turnaround: the first being the unprecedented decline of new construction and the second is a dramatic drop in prices. The reason behind this factors, Fortune states, is the "astonishing flight from the traditional American approach of buying new houses to an embrace of renting." In roughly half of the major real estate markets paying a mortgage on a house is cheaper than renting one.
Moody Analytics' chief economist Mark Zandy is quoted in the article saying that he expects prices in "virtually all" markets where homes prices went up less than in other "bubble" areas to rise faster than inflation to align with rent prices as apartments are in short supply.
In the true disaster areas for housing, Sunbelt cities such as Miami, Phoenix and Las Vegas, are seeing their markets recover slowly but surely. Foreclosures are attracting investors big and small and while available new homes are few, they are slowly growing.
Each real estate market is different, but over all, the decrease of available new homes, more people opting to rent rather than buy plus an overall decline in housing prices makes new homeownership a worthy investment. In the future, Castleman predicts, supplies will get tight due to demand and that will lead to a rise in prices. What does this mean for the potential homebuyer? Buy now before demand brings prices back up! To read the complete article click here.
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