The home sales trend for 2014 has shown a marked improvement over sales from the same period in 2013. According to the Christian Science Monitor, the number of foreclosures in April 2013 also fell to its lowest since 2007. While some would say this foreclosure trend is due to the banks getting smarter with their lending procedures, others attribute the increase in sales to an upswing in the economy.
In spite of the recent home sales trend, a few factors are preventing the industry from making even larger strides, a situation some refer to as the housing chill. These factors include a limited housing supply, the rising cost of loans, and the still-stringent credit restrictions on buyers. According to Bloomberg, new-home purchases climbed unexpectedly in January 2013, reaching their highest level in more than five years. This home sales trend is unusual due to the extremely harsh weather that has been plaguing the country.
One reason for the downward foreclosure trend is the increase in short sales, also known as preforeclosure sales. Rather than foreclose on property owners, lenders are turning to short sales to help people move out of homes they can no longer afford. A short sale occurs when a home is placed on the market and the proceeds from selling the property go to pay the balance owed on the mortgage. In these cases, the home is usually sold for less than what is owed. A short sale is ideal for those who can't refinance or modify their mortgage, perhaps due to credit issues or the amount owed on the property. Short sales are sometimes a good solution for consumers who are facing hardships or are behind on their payments.
Even with the recent home sales trend, a problem remains. While the market continues to show a steady climb in sales, there is a shortage of affordable homes (those priced below $300,000) on the market. According to the Seminole Voice, the number of condos on the market priced at or below $200,000 is also small. The steady increase in sales has resulted in rising home prices, creating difficulties for first-time homebuyers.
Regardless of the home sales trend across the country, the total number of sales is still not back to normal levels for this time of year. As home prices continue to increase, unemployment decreases, and the economy consistently improves, investors and experts are hoping the market will eventually stabilize.
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