Goodbye doom and gloom. While a housing rebound has been evident recently, it is new news for the media to agree that the real estate market is on the upswing. Consumer confidence is up, foreclosures are at a 5-year low, construction jobs are back, and moving trucks are on the road again.
Just this week a Deutsche Bank executive wrote that the "residential housing market is in the very early stages of a durable recovery" and noted the housing recovery is important because housing is what led the US economy into a recession. And Barclays Capital recently forecasted that home prices could be back to peak levels as soon as 2015.
Locally, activity in the Boulder, Colorado area market is busy. But it’s a double-edged sword. Some homeowners who would like to sell are holding onto their homes longer, in hopes that the improvement we’re seeing in the market will increase their home price. But right now, inventory is tight and buyers aren’t always finding what they’re looking for. So, many buyers continue to sit on the sidelines.
Sellers need to factor in the cost to hold. Let’s say their home is currently worth $400,000, and they’re estimating a 3% appreciation for holding on one more year. That would put the home value at $412,000. Sellers need to weigh the perceived benefits of putting their life plans on hold for one more year. It’s hard to put a price on uncertainty, and as recent years have taught us, home prices can be unpredictable. For sellers on the fence and buyers on the fence, there’s no time like the present.
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