There are times when economic circumstances put home ownership on shaky ground. It can happen when the economy is down, but surprisingly it can also happen when economies are booming. As we’ve hit mid-year, we’re in an interesting time for housing both nationally and locally. Let’s take a look at some mid-2017 real estate market trends:
The Mid-2017 Real Estate Market Scene:
Rent vs. Own
As large property investment firms have discovered the value of purchasing homes and then renting them out, we are seeing a sharp rise in the number of families renting homes instead of buying them. When the firms come in with cash offers, often over listing price, this can edge potential single family home buyers out of the bidding. These bidding wars are having an effect on the market nationwide.
Loosened Lending Standards
In Q2 this year, it was reported by Business Insider that mortgage lenders have reported easing credit standards, and expect to continue this trend in the coming months. The demand for mortgages is tapering, with lenders of various sizes reporting their reasons being, “Higher rates,” “lack of inventory” and “cost of housing.” The easing of standards may also be a function of increased competition among mortgage lenders.
The West Virginia Snapshot:
Truth be told, home sales are low in West Virginia. In the 30-day period ending July 20th, 459 homes were sold in the state, representing a 7.6% drop in sales activity. As such, inventory has increased. The downturn in sales and the increase in inventory means West Virginia is still a solid buyer’s market.
But what is really happening here?
Are we starting another cycle of foreclosures or is it that the dust continues to settle or effects trickle down from the last cycle? Sometimes it takes years for the full realization to impact all levels of a transaction or business relationship, including the homeowner, their job situation, health. The hope is that recovery will happen sometime during that period, but when it doesn’t, it can almost appear as if a new instance of market drop is happening, when in reality, it had never completed its downward spiral. We realize this isn’t the happiest news, but we need to brace ourselves in these markets for the continued struggles buyers, especially in states with a lower economic level, continue to have. We need to have solutions to help transition them into housing that they can afford and revitalize what is being abandoned. That revitalization can also create jobs, stronger economy, but it’s such a delicate cycle with so many teeth in the gears.
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