Low Inventories Indicate a Trend

Low inventory is a relative term depending on how you're comparing it.  Would the comparison be to total number of homes on the market last year, homes in a certain price range or homes in a certain area?  In some situations, it's a combination of all of those things.

In any given market, inventories will fluctuate based on area and price range.  The National Association of REALTORS® considers a balanced market to be six months' supply of homes.  If it takes longer than six months to sell, it is thought to be a buyer's market and less than six months, a seller's market.  Most buyers and sellers probably feel inventory equilibrium is more like three month's supply of homes.

Inventory has a direct impact on price.  During the housing bubble, demand decreased, supply ballooned to four million houses and prices dropped dramatically.  Increased inventories due to foreclosures, bank' revised lending practices and builder's lack of new housing starts each contributed to the dramatically lower prices.

As the market has recovered, economic conditions have improved, banks have loosened their requirements, interest rates have remained low, foreclosures have slowed and gradually, the inventory has been reduced to approximately two million houses.  When demand is constant but inventory is reduced, price tends to increase because the same number of people are trying to buy a smaller than normal number of homes.

Based on the low mortgage rates that have been inching up each week in 2013 and an improving consumer confidence level, most markets are experiencing some increase in demand.  With inventory decreasing, buyers in the marketplace can see that prices are increasing.

Just as signs of spring can be seen to be just around the corner, it should be recognized what direction prices will be moving.  Hindsight is 20/20 but we can't purchase or sell in the past.  We need to make decisions today on what we think will happen in the future.

If you're curious to know what inventory conditions are for your specific market, send me an email with the price range and area and I'll send you a report.  monica.brewer@coldwellbanker.com

Refinancing Again

We're constantly bombarded by lenders to refinance our mortgage under a variety of programs. The volume of offers can almost make you numb to the rational consideration.

There are common rules of thumbs that homeowners and agents use such as not refinancing more often than every two years or there must be at least 2% savings from your previous mortgage rate may not always be accurate.

The reality is that if you can refinance for a lower rate and you'll be in the home long enough to recapture the cost of refinancing, it should be considered. The costs of previous refinancing that haven't been recaptured by monthly savings may need to be added to the costs of the new refinance.

Take a look at the chart that shows the average rates according to Freddie Mac for 2012. They are lower today than they were in January of 2012 and for the ten years before that.

Refinancing may save you a substantial amount of money, especially if you're going to be in your home for a long time. It is definitely worth investigating. To get a quick idea of what your savings could be, use this refinancing calculator.

Midwest Treks

Midwest cities have a large unfair advantage: close proximity to some of the most beautiful natural wonders of our country. A mere 20 minute drive out of St. Louis and you are embalmed by the indescribable scent of fresh air, cascades of green, and crisp waterways. Rolling hills fence in the city awaiting adventurers and serenity-seekers alike. It is the prime real estate for weekend getaways, day trips, or longer explorations of the natural landscapes.

Take a relaxing hike or hit the mountain bike trails for an afternoon at Castlewood state park:

Located on the Meramac river with scenic bluffs, broad meadows, winding trails, a bird sanctuary and plush St. Louis history, this is a great place for a day trip with or without the family. http://mostateparks.com/park/castlewood-state-park

Take a weekend to canoe the 11 point river:

This vast river winds through the Missouri Ozarks and offers access to caves, waterfalls and a natural fed spring. With several launch points, make it as short or long as you would like. Explore the Ozarks in their most pristine form, watching the sunset on the river with nothing but the beautiful surroundings of nature, your loved ones, and the unique wildlife.
http://www.11pointcanoe.com/

Or voyage northbound to camp at Devil’s Lake, Wisconsin

Located near Baraboo Wisconsin, Devil’s Lake offers miles of hiking, swimming, rock climbing...

not to mention the  remnants from the Ice Age Midwest glacier. http://www.devilslakewisconsin.com/

The state parks are well maintained and equipped to entertain everyone from the city slicker to the outdoor novice. Where will you be enjoying your prime real estate this summer?

Written by Ciara Brewer, Photographed by Rachel Broaddus on behalf of Monica Brewer