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Appreciation of homes in DC could start increasing in spring 2010.
With median sale prices down 23 percent from their peak in summer 2006, homes have become more affordable in the DC market. Some of the contributing factors have been the extension of the first time home buyer tax credit
Many of those vigorous in the housing market are the first time home buyers or investors to gain from the lower prices of the current inventory of homes. The sale of foreclosed properties rose in 2009 in four years and January buyers are expected to continue to shop based on home affordability.
“There have been homes that have been vacant for two years and investors can purchase at the current low prices and profit from the potential rental income. Many investors should not ignore commercial property because once the unemployment rate stabilizes these empty lots could be real gold mines,” said Ian Johnson, Pillar Property Group.
The inventory of unsold homes on the market fell about 7 percent to 3.3 million. This averages a 7.2 a month supply at the current sales pace, close to a healthy level.
“Individuals considering in buying or investing in homes should do so now. Once the market itself starts stabilizing due to reduction of inventory, prices will start increasing within the market itself,” said Eric Skeeter Pillar Property Group.
The Obama administration’
The Treasury Department plans later in January to announce a streamlined process designed to get more borrowers to complete the loan modification programs, according to a spokesperson. The programs is designed to reduce mortgage rates to as low as 2 percent for five years.
“This program sounds good in theory but you have two distinct entities working together to slow down the foreclosure rate in the U.S. First, you have the government who has certain qualifiers to be met for the consumer. Of course, you have financial institutions that have their own agenda and qualifiers. It can be all too baffling for the consumer,” said TJ Noye, Precision Funding.
It would be better for homeowners to work with a mortgage professional to cut through much of the bureaucratic red tape that surrounds government programs, according to Noye.
“Sometimes the foreclosure process has already begun for homeowners who have sought out assistance of such joint programs,” said Noye.
There is still optimism for the real estate industry. The national number on the sale of all housing types, including townhomes and condos, rose 15 percent.