My Crystal Ball Predictions for Real Estate & Mortgages in 2013
Thursday, February 21, 2013
What My Crystal Ball Says About 2013
Well, another year has come and gone. Where does the time go? The good news is it was a great year for the Real Estate Market in Metro Detroit and a pretty good economic year for the entire State of Michigan. Michigan's unemployment level reached a peak of 14.2% back in August of 2009 in the midst of the financial crisis and I'm happy to report that unemployment has dropped to 8.9% since! Still a touch higher than the national average but what an improvement. This marked improvement in the State economy has led to a 180 degree turnaround in the real estate market. In Oakland county the number of homes sold in 2012, through November, was up 6% over 2011 and average sales price was up over 14%! Yes, that's right, home prices are rising! In Macomb County the number of homes sold was up over 13% and the average sales price was up over 11%. The supply of homes on the market has dropped considerably and now properly priced homes are selling in a matter of days, and sometimes with multiple offers. Now is really a great time for people to take advantage of the market and upgrade their home as values have gone up, making it easier to sell an existing house, but you can still buy your dream house for a good price. Plus, interest rates remain near all-time lows.
A great 2012 but what's in store for 2013? Well, I decided to consult my trusty crystal ball and see what it had to say (the thing does lie to me a lot but usually some of what comes out of it actually comes to pass). First - What is the next PowerBall winning number?. . . . . . nothing. Ahh who cares. I think $200 million would probably ruin my life anyway. Right?
The crystal ball says In the year 2013 interest rates will rise a bit. An overall improving U.S. economy is going to put upward pressure on rates. I expect by year end that mortgage rates will be 1/2 to 3/4% higher than they are currently. That would put the 30 Year Fixed rate somewhere in the 4.0 to 4.25% range - overall still very low from a historical perspective and should not be enough of an increase to hamper home sales.
I see Real Estate sales accelerating causing further increases in prices. A continued low supply of homes on the market combined with the current fervor of buyers will push home prices up 8 to 10% in Southeast Michigan over the course of the year. Cool!
The crystal ball is really positive about the new year and so am I. It seems the storm has passed. 2013 is shaping up to be a GREAT Year for Real Estate and for Michigan in general! Here's to a successful and Happy New Year for us all!
Ken Mascia, Licensed Loan Officer NMLS 135323
