4 Truths About Todays Real Estate Market

It is certain the real estate market has had a roller-coaster decade?climbing to new heights in demand and price, then plummeting in stomach-dropping dips. Housing indices and reports are just as up and down, oftentimes with conflicting data that have home buyers and sellers across the country scratching their heads. No matter what the media or industry analysts say, there are some realities of the current real estate market we can count on?Firstly, the days of flipping are over. Even the most famous flippers (those who made TV shows out of their quick property turnovers) are resigned to the fact that real estate is a longer-term investment nowadays. Buyers realize a home purchase is a lasting venture that requires financial stability and affordable mortgages. Most experts say you should plan on living in the home you buy for at least 7 to 10 years in order to break even when it comes time to sell again. That?s for the average market, though. In places with a high number of foreclosures, the wait may be longer. However in cities where home sales are healthier, owners could buy and resell in a shorter time period and still come out ahead.

Second, financial responsibility has returned. In order to qualify for a mortgage these days you need to have very strong credit and a good chunk of change for a down payment. People can no longer buy a property with little or no money down, such as was commonplace during the housing bubble. Now buyers lean on the side of caution when it comes to purchasing a home?and lenders are doing the same when it comes to issuing loans for home purchases. This acute accountability of lenders has made it much more difficult to secure a mortgage and has kept some willing buyers from buying properties quickly. As a result, many buyers find themselves in the planning process for an extensive period of time, which allows for a better opportunity to gauge housing trends, learn about mortgage options and build up a nest egg for a down payment.

Third, distressed properties demand attention. With such a large inventory of foreclosed, abandoned and vacant homes in markets around the nation, there is a call for action to do something about this less-than-desirable segment of real estate. A number of cities (including Chicago) have implemented programs that help demolish, renovate or repurpose distressed properties. These initiatives not only address a major factor of ongoing blight in certain neighborhoods, but also help tackle the issue of home value depreciation in areas where foreclosures and short sales are rampant.

Lastly, upgraded unsellables await the market. Many homeowners who tried to sell and couldn?t are just biding their time before re-releasing their homes on the market again. Some pulled their listing because the offers were too low. Others had been up for sale for months without a bite. Whatever the reason, plenty of people have decided to take their homes off the market and ?make it work? for a little while longer until the economy stabilizes. But here?s the thing, homeowners who wanted to move up to bigger and better abodes (but are stuck because of the market) have been making money-saving improvements to their existing homes with a rash of energy-efficient upgrades. High-efficiency windows, doors, appliances, mechanicals and green alternatives are widely eligible for government tax credits and other grants. As soon as prices start to rebound, these suped-up homes will re-enter the market with a whole new list of features to attract cost-conscious buyers.