1. Rising Home Prices: The slow pace of new-home construction is continuing to push prices up.
2. Rising rents as more young people enter the market: Young people, who have been riding out the shaky economy by living with their parents or friends, are moving into their own apartments as they start to get jobs. Also, those who lost their homes in foreclosures or sold them in short sales must rent for a couple years.
3. Fewer foreclosure bargains: The equity position of thousands of borrowers has improved with rising home prices. Add to that, metro Denver has low inventory. Home prices will likely continue to rise.
4. More short sales: Borrowers may receive deficiency waivers, which means they do not have to repay the difference between what they owe on the mortgage and the final net to their lenders. While foreclosure sales will likely keep falling, the number of short sales could rise as folks try to get out from under water on their homes. However, borrowers should be sure they qualify under the Mortgage Forgiveness Debt Relief Act. Click Here for more information
5. More first-time home buyers: Growth in demand for single-family homes will likely be driven by first time home buyers.
6. Higher home construction costs: Building materials, like sheet rock, lumber, and copper, are expensive even though levels of home construction remain low.
7. Property management boom: The Federal Housing Finance Agency began selling foreclosed properties in bulk to large institutional investors who agree to hold and manage them as rentals. That intensified the trend already underway toward investors snapping up distressed properties to rent.
8. Rising mortgage interest rates: The National Association of Realtors® predicts that rates will gradually rise to an average of 4 percent this year, up from about 3.5 percent in September of last year.
9. Easier credit standards: Qualifying scores will start dropping as more qualified buyers come into the market and lenders compete to offer them loans.
10. Two-tiered home-building industry: Banks have been reluctant to make construction loans. Thus, the result could be more consolidation in the home building industry with ultimately less competition and higher prices for everyone.
