Foreclosures: Too Spooky Even for Halloween?

by on Foreclosures

Foreclosure Halloween

Rest assured, the title is merely a tongue-in-cheek way to talk about foreclosures – specifically the future of the housing market. We're not saying Halloween is in danger, so tell your kids not to worry as they will still get bags full of candy this Halloween.

However, it is fun to wonder about the state of the housing market. For example, what will the market look like on Halloween, 2013? Will it be more of a trick – or a treat?

The Trick: The Current Real Estate Market

Home prices are rising throughout the country. In fact, according to the S&P/Case-Shiller home price index, home prices rose 0.9% making August the fifth month of home price increases for the 20 cities covered in the report. Phoenix comes in at the top of the charts with an increase in home prices from August 2011 to August 2012 of a shocking 18.8%.

Although home prices are consistently rising, interest rates are still low as overall home prices are still well below "normal" providing incredible opportunities for potential homebuyers and investors alike.

At the same time, many homes are still vacant due to foreclosure, which truly could affect your child’s Halloween experience – especially for those living in areas with a high foreclosure rate. The question is not where we stand or if we are making progress toward recovery (we definitely are), but is instead what will the next year mean for the real estate market?

The trick is understanding the current struggles in the real estate market and still being able to look for the light at the end of the tunnel – the treat.

The Treat: Real Estate Market Outlook

It would be great to be able to tell you that by Halloween 2013 the housing market would be back to "normal". What, exactly, can we expect for 2013?

The answer you get will depend on who you ask.

Simply put, the real estate market in 2013 will continue to make progress toward recovery with home prices rising and interest rates more than likely remaining low. Investors and potential homebuyers will continue to gain confidence in the real estate market and will therefore increase their investments and home purchases, driving up home sales.

At the same time, lenders will strongly encourage those facing foreclosure to undergo a short sale in an effort to meet the demands of the foreclosure settlement agreement. As a result, incentives for short sales are likely to increase.

The specific real estate outlook for 2013 is dependent upon the current status of the local real estate market in which you are interested; however, overall real estate progress will continue nationally although the underlying issue (lenders providing loans to those who are unable to pay their mortgage payments) will essentially go unaddressed.

In short, home prices will start to climb throughout 2013, but will remain below the values seen before the recession and interest rates will remain favorable for borrowers. Therefore, if you are looking for a new home in one of the best places to retire or if you are a seasoned investors looking for incredible deals, then 2013 will be the perfect time to buy.

At the end of the day, Halloween will still occur, regardless of what the housing market looks like today or in 2013.

Cartoon by Ed Stein.