It’s been a buyer’s market ever since the stock market crash in 2008. The recession ushered in a flood of foreclosures and unemployment that not only put the United States into dire fiscal straights, but also the global economy as well.
During that time the Federal Reserve has done everything that it could to help ease the bleeding and put the economy back on track. The Fed adopted a number of policies to help the market gain momentum, but it’s most noteworthy policies revolve around its decision to buy back large quantities of troubles assets in what it calls “quantitative easing” in order to help stabilize the market.
To some extent, these policies have actually been effective and the health of the housing market is continuing to improve. Economists are counting on a strong rebound in the housing market for 2013 to drive economic growth.
Not everyone is convinced that a housing rebound will happen, but nearly half of the economists surveyed by CNN money expected the housing sector to be a bright spot in 2013 and finally push the recovery into full force.
Insiders in the real estate industry are arguing that the housing sector is beginning to look more stabilized. But what does this mean in practical terms? A balanced market is one in which there is approximately six months of inventory available for home buyers to purchase.
This principle follows the basic laws of supply and demand. When you have a lot of a certain product, in this case houses, the prices are going to go down because there is a lot of competition. When you don’t have a lot of a certain product, then there is less competition and the commodity in question becomes more valuable.
This has important ramifications for those wanting to purchase a home. If you’re looking to buy a home in 2013, now is probably going to be the best time to do that. As more and more people manage to successfully sell their homes, the existing number of homes left of sale in the market will see a noticeable increase in price.
You can already begin to see this trend simply by looking at home prices from 2011 to 2012. Home values rose approximately 5.4 percent from 2011 to 2012. If you’re home was worth 280,000 in 2011, then you can expect to be able to sell it for around 295,000 in 2012.
Looking at statistics in the housing market can often prove to be tedious and not that helpful for the average home buyer. But as long as you understand current market trends and have a fair view for where the industry is going, you’ll be much better equipped when you either have to buy or sell your next home.
