It's hard to believe another year has come and gone. Looking back, 2013 indeed was a pivotal year for housing markets nationwide. Many markets saw an incredible bounce back, homeowners regained equity and mortgage rates for the most part remained incredibly low. Here's a look back at the highlights that stood out and will help us understand how housing will perform in 2014.
- Home sales soared for the most part - Despite the fact that home sales have hit some seasonal slippage here near the end of the year, it's hard not to remember the amazing summer that took place in many markets.Home sales hit their highest level in over six years in August, and took prices along for the ride. NAR data showed that end-of-summer sales hit an annual rate of 5.48 million in August, the highest pace since February of 2007.
- Home values inched toward record highs - Perhaps even better news for America's homeowners and sellers was that the national median price for existing homes made major strides in 2013. After a hot summer, the median price was $212,100 in August, up 14.7% from the same month in 2012.
- Negative equity eased - Of course, one of the best side effects of the rising strength of home values was the easing of negative equity for homeowners. One of the big stories of the fall was data released from RealtyTrac that showed 8.3 million homeowners – or about 18% of homeowners with mortgages – were on track to gain enough equity to sell their homes in the following 15 months without resorting to short sales. Of course, this doesn't mean that 8.3 million homes will come on the market for sale next year. But it does mean a lot more options for sellers who've wanted to sell.
- Seasonal cooling landed - The year was not immune to occasional doses of more sobering news. An expected period of cooling off indeed took place in the fall. It almost had to, given the booming summer that real estate markets experienced. Total existing home sales fell to a rate of 5.29 million in September from August, though it's worth noting they remained 10.7% above year-ago levels.
- Access to mortgage improved, despite pockets of interest rate increases - This month, we saw two great pieces of news that have to do with improving overall access to mortgages. Federal housing officials said they would leave the GSE loan limits as is, which means borrowers in higher-cost areas will still continue to see opportunities for Freddie Mac and Fannie Mae-backed loans. And a report showed that loan eligibility continued to increase for borrowers in the first half of the year.
- Smaller cities took the lead - In NAHB's fall housing index, the builders group found that smaller cities are leading the way to a housing recovery. Smaller cities accounted for 43 of the top 50 markets in the NAHB's index released in October, underscoring how much local economies play into housing activity.
- House flipping made a comeback – at the high end - A Reuters story in August investigated a rising trend in flipping homes, revealing that the number of flipped homes valued at $1 million or more had risen nearly 40% nationwide since 2011. RealtyTrac also cited a few specific markets where high-end flipping has become rampant. Luxury flipping was up 867% in Orlando between 2011 and 2012, and increased 456% in Phoenix.
- 'Boomerang' buyers returned - What's a boomerang buyer? A former homeowner who's gone through short sale, foreclosure or bankruptcy in the past few years who is now preparing to buy a home. 2013 saw many more of these folks coming into the market – a good sign as it shows positive sentiment for homeownership from a group of folks who perhaps have the biggest reason to run far far away.
Wow, 2013 was exciting, fast-paced and overall really positive for our housing markets.
Of course, there's still more work to be done in 2014.
Happy holidays from all of us at Intero Real Estate!