|This Spring Is The Time Buyers Should Consider|
March Buying Advice: Pending sales are up, and experts say the economy is stronger. With mortgage rates still pretty attractive, it might be time for some fence-sitters to become homebuyers.
Just as the spring selling season is nearing, there are some encouraging signs that it might be time for buyers to dip their toes in the housing pool again.
Pending sales are up, inventory is down and some economists are predicting an end to the housing crash this year. What does this mean for home shoppers? How should it shape their strategy? We'll ask the experts to weigh in.
In this installment of Buying Advice, we'll also look at how best to navigate the purchase of a short sale. We asked our readers who have bid on these properties to share their experiences and advice, and we consulted a short-sale negotiator for her tips on landing one of these distressed bargains.
What should buyers expect this spring?
Falling home prices have made most buyers understandably nervous about pulling the trigger on a purchase. Why buy before the market hits bottom, right?
The latest numbers showed that the housing market isn't quite there: S&P/Case-Shiller's 20-City Composite Home Price Index fell 3.9% in the 12 months ending in December, and price declines escalated at the end of the year. The bad news was widespread, with 18 of 20 metros posting declines. Miami and Phoenix were the only markets to pick up at the end of the year, and Detroit was the only city to post an annual uptick.
So why should buyers get off the fence?
The good news is there's really not much further to fall, says economist Paul Dales of Capital Economics. Case-Shiller's report showed prices dropping faster at a time when housing prices typically do decline. Prices continued to drop at a slightly faster rate at the end of the year, but Dales says they won't be dropping much longer.
And there are already signs that demand is coming back. Contracts to purchase existing homes neared a two-year high in January, rivaling the period before the expiration of the first-time homebuyer tax credit, according to the National Association of Realtors. Pending sales increased 2% in January over the previous month and 8% over January 2011. That figure also suggests that home sales will have increased again in February after ticking up in January.