huntsville al mls housing outlook

Source; Daily Real Estate News; The Wall Street Journal / Nick Timiraos; REALTOR® Magazine / Brian Summerfield












4 Housing Issues to Watch in 2013





What does 2013 have in store for the housing market? With marked gains this year, housing experts expect the housing market to continue to gain momentum in the new year.



The Wall Street Journal recently offered up some chief housing issues likely to be important in the New Year. These include:







Inventories rise: To meet the increased demand, home builders are increasing production and more sellers may be more willing to test the market as housing prices increase.













Home prices spur demand: Huntsville AL MLS More buyers have urgency with home purchases as rents rise, housing values gain momentum, and mortgage rates remain low.

Credit remains tight: “While rising prices could serve as a tailwind, new regulations may lock in some of the defensive underwriting posture while impeding capital rules may lead banks to pare their lending footprint,” The Wall Street Journal predicts.





Broader economy dictates how far recovery goes: If unemployment decreases and the economy improves, many of the biggest challenges facing the housing market would likely fade, such as tight credit, the large number of underwater home owners, and a high rate of foreclosures.

“Any renewed weakness in job growth could put housing back into the stall that it found itself in between 2010 and 2011,” The Wall Street Journal reports. “The housing market is still fragile. ... If lawmakers can’t agree on a series of spending cuts and tax hikes to avert the ‘fiscal cliff,’ that could crimp demand or damage confidence.”











Home prices finally hit a bottom in 2012. So will 2013 be the year of recovery or relapse? Each day this week, we offered an area of focus for 2013. Here’s a recap of our earlier predictions, and the final installment:











1. The shadow inventory is shrinking. Banks could begin to increase the pace of foreclosed-property sales in markets with large backlogs, but they’re unlikely to deluge the market.



2. Rising prices could boost demand. Buyers now have something they haven’t had in the past few years—urgency. Rent and price gains are beginning to change consumer attitudes about home purchases.



3. Housing inventory should hit a bottom. Builders are ramping up new construction, and price gains could lead more would-be sellers to test the market.



4. Credit standards should stay tight. While rising prices could serve as a tailwind, new regulations may lock in some of the defensive underwriting posture while impeding capital rules may lead banks to pare their lending footprint.













Interactive: Hntsville AL MLS Housing inventory drops in November 5. Home prices should stay in positive territory next year, but everything ultimately depends on what happens in the economy. Job growth hasn’t been great, yet it has been strong enough to nudge the housing market forward. If it continues, the experience of the past year shows that the sector’s many challenges—tight credit, high levels of underwater borrowers, and elevated foreclosures—can be overcome.











To be sure, annual price gains of some phenomenal magnitude (see Phoenix, where prices are up 17%) aren’t sustainable unless incomes pick up. Instead, prices that have been rising in these hard-hit cities are more likely rebounding from extremely low levels—the result of housing having fallen far below its replacement costs—and recent gains should eventually level off at a more measured pace.







Any renewed weakness in job growth could put housing back into the stall that it found itself in between 2010 and 2011. The housing market is still fragile. Millions of homeowners owe more than their homes are worth, and millions more don’t have enough equity to make a down payment on another home.







If lawmakers can’t agree on a series of spending cuts and tax hikes to avert the “fiscal cliff,” that could crimp demand or damage confidence. There’s also still the potential for a renewed recession from the euro-zone crisis, or the prospect that short sales slide because Congress doesn’t extend a tax provision that allows borrowers to avoid paying taxes on forgiven mortgage debt.







The fiscal cliff talks will bring renewed scrutiny to the mortgage-interest deduction. Few expect a wholesale repeal of the deduction. More likely are compromises that cap overall deductions, that reduce the deduction for top earners, or that limit the deduction to interest on $500,000 in debt.











But absent a renewed recession or other unforeseen shocks, housing in 2013 looks poised to consolidate the gains of 2012. Huntsville AL MLS The Federal Reserve has made clear it will do what it can to be rates low. Homes are still at their most affordable levels in at least 15 years, based on traditional price-to-income and price-to-rent measures. And housing is expected to begin contributing more meaningfully to the economy









When we look back on 2012 a long time from now, it may be viewed as the first year of the recovery, the year in which real estate reversed its course and moved in a more positive direction.







With that in mind, here are 13 reasons — courtesy of Huntsville AL MLS REALTOR® Magazine’s online news — why real estate pros can look forward to next year:











1. There’s greater optimism about increasing home values.



2. More new households are forming.



3. Home shoppers are feeling a greater sense of urgency.



4. Home ownership remains a goal of members of the Millennial generation.



5. Foreclosure starts are falling to pre-housing-bust levels.



6. Interest rates should remain low through next year’s selling season.



7. Loan demand for home purchases is climbing.



8. More Americans say it’s a good time to sell.



9. The number of improving housing markets is going up.



10. Job creation is expected to provide a much-needed boost to the commercial sector.



11. Housing starts are picking up as builder confidence increases.



12. As housing values rise and equity returns, fewer home owners are underwater.



13. Real estate is contributing to an overall economic recovery.







That’s not to say there aren’t challenges. Huntsville AL MLS Lending remains tight, there’s a large foreclosure backlog, and regulatory challenges and the fiscal cliff loom ahead. But on balance, real estate appears to have a bright future in 2013.