It’s hard to believe January is already behind us.
As is often the case with the start of a new year, there’s been quite a bit of speculation about where the housing market is headed following what was a good year to be both a homebuyer and a homeowner.
Although mortgage rates trended up just about half a percentage point in 2013 - from a national monthly average of 3.7 at the beginning of the year to around 4.3 percent near the end, anyone with historical perspective will tell you how today’s rates still offer an excellent opportunity to maximize buying power.
While some economists point to factors such as continued tightness on the supply side of lending and a projected increase in demand due to growth in the economy as reasons why mortgage rates could creep up this year, others predict rates will remain relatively flat throughout 2014. These experts cite the fact that the overall economy and the Fed have the most influence on mortgage rates, and while the economy continues to recover from the Great Recession, the pace is very slow.
Just as the aftermath of the perfect storm of low interest rates and affordable prices remained good for buyers, the fact that home prices increased in 2013 was welcome news for owners. Year over year, home prices increased 3.7 percent at the end of December according to the Greater Northwest Indiana Association of REALTORS® (GNIAR) which provides data for Lake Porter, LaPorte, Jasper and Newton counties.
With the housing recovery gaining traction in late 2011, December of 2013 marked the 30th straight month of increased sales activity since the market peaked in 2006 based on GNIAR’s latest report. Year over year, GNIAR reports the number of homes sold increased 12.1 percent in December 2013 versus 2012.
According to Jeanne Sommer, broker/owner of CENTURY 21 Alliance Group, as 2013 came to a close, the Northwest Indiana real estate market continued to show significant increases over last year - the number of homes sold throughout the year increased in both Lake and Porter Counties from 2012 to 2013, and the number of days a home was on the market decreased while the average price increased in both counties, all indications of a healthy market.
Specifically, through December year over year, the number of homes sold in Lake County was up 19.5 percent, while the average amount of days a home was on the market, a key factor in the health of a market, decreased 13 percent.
From 2012 to 2013, the number of homes sold in Porter County increased 18 percent, and the average number of days to sell also decreased 13 percent.
Housing inventory, another key factor, remained below six months, meaning the current inventory is expected to sell within that time frame.
“Anything below a six-month inventory is a very good market,” Sommer added. “In 2014, we anticipate another 15-16 percent growth”
Traffic during last weekend’s New Year New Home Tour sponsored by the Times is certainly an indication that the local housing market is off to a great start in 2014. Participating builders were pleased to meet all the people who stopped by to see their latest models and learn more about the building process. A few even reported serious inquiries from buyers who are actively looking at homes to by now – but had no idea there were so many new construction options available for them to consider.
For those who would like to make a move in 2014 while mortgage rates and prices are still very affordable when compared historically, a great first step would be to check your credit report at annualcreditreport.com for errors. You are entitled to one free report from all three reporting agencies each year – these reports do not include your credit score but are very valuable when it comes to finding any errors in your credit history that may need to be addressed before meeting with a lender.
Then, once a lender helps you determine a price range based on a mortgage preapproval (be sure you understand all of the costs involved with closing a real estate transaction), you can reach out to a Realtor® who has very specific knowledge about the local area where you would like to live. Then, just as sellers use comparable homes to determine their asking price, you should tour several homes to determine the best possible value in your price range prior to making an offer on the home you ultimately fall in love with during your search.