The WSJ published this piece today—Home Prices Rise, Yet Confidence Fades—which highlights just how tricky things are in the housing market today. As always, you want to look at home buyers and sellers separately.
For home sellers, the fourth straight month of home value increases is a breath of fresh air after all they’ve been through. Home values are still down from highs that occurred in 2005 and 2006 (depending on the market) but it’s most assuredly a step in the right direction. As prices continue to rise, expect to see more sellers list their homes, especially in the Spring.
Home buyers, on the other side, are seeing the end of bargain basement prices that many have enjoyed during this housing downturn. As prices return to more normal levels, Louisville home buyers will now need to pay a little more to get their choice home.
Inventory levels are still high (7,754 active listings for single-family homes in the Louisville MLS) and interest rates are just a point higher than the 30-year lows we experienced in 2003 (see below). In this environment, home buyers are still getting two of the three important factors to lean in their favor.
The other piece of news in the WSJ article highlights that consumer confidence is down and appears to be dropping. This makes sense in light of the current unemployment situation but also points to consumers having little optimism about the direction our economy is heading. The current administration is spending money at a record pace while small businesses continue to bear too large a tax burden to truly foster innovation on a large scale.
Based on this, all consumers are wary about how they spend their hard-earned dollars, and understandably so. A great deal will always depend on your particular situation.
If you are considering a real estate transaction, my best advice is to find a trusted Realtor® and chat with him or her about your home and future plans. If you’d like to contact me, I always welcome emails from my readers.