Early in my real estate career I was told that when anyone asks you, “how’s the real estate market” you should always answer with “unbelievable.” Theory was that could be unbelievably bad or unbelievably good, but the market is always “unbelievable.”
Well 2012 was truly UNBELIEVABLE!
After the real estate market crash in 2007, the industry was hit pretty hard. Home values plummeted even in the strongest, most desirable markets, and with the new restrictive lending guidelines, there was no hope in sight. The market started to stabilize in 2010, but it wasn’t until 2012 that we finally saw the first hint of recovery.
Almost overnight and with no warning, the climate changed from a “buyer’s market” to a “seller’s market.” A dramatic decrease in homes available for sale and a surge of buyers wanting to take advantage of low interest rates and rock-bottom prices lead to multiple offers and bidding wars…something we hadn’t seen in years!
One of the best parts about all of this is the renewed confidence in the market. Many who lost their homes early on in the crash are now at the recovery stage and ready to buy again. Those who have equity are looking to move up or down now that it’s a good time to both buy and sell, and best of all new home builders are building again. That’s a sure sign that we are on the road to recovery.
While this dramatic shift from buyer’s market to seller’s market has presented a new set of challenges, Realtors across the country agree that the renewed activity is what we’ve all been waiting for.
But what does it mean for 2013?
One thing is for sure; the recovery is just beginning but if 1. Interest rates stay low and 2. The Mortgage Debt Relief Act is extended, we will continue to see strong activity, increasing property values and continued consumer confidence. The additional benefits come from new home buyers and seller who stimulate the economy by painting, buying furniture and making other improvements that trickle outward to industries beyond real estate.
The number of homes that are “underwater” and how many distressed sales we will see this year remains to be seen, but I’d say that chances are good that we will experience a strong market throughout the year and will be a good thing for all of us.
Erin Kutnick is a Realtor with 27 years of experience living and working in San Juan Capistrano.