Now is the time to utilize all investment property finance options
The latest news for property investors is that according to the National Association of Realtors, pending house sales are rising. Their index of pending home sales indicates a 4.1% increase in March compared to February, and is almost 13% higher than March of last year. This information reflects contracts on houses that have been signed but have not closed yet.
The index is also now showing that pending home sales are at their highest level since April of 2010. In this first quarter alone, closings were at their highest level for a first quarter in five years. The indications from the March pending home sales index now suggest that actual second quarter sales will be very good as well.
Sales are considered “pending” when contracts have been signed but the deal has not closed, so the sale has not been finalized yet. Closings usually take 1 to 2 months after contracts are signed to finalize. The latest pending home sales index is based on a very large national sample and represents about 20% of existing sales transactions.
The bottom has been reached
As I had written back in mid-March, I firmly believe from all the economic indicators over the last couple months that the bottom of the real estate market has been reached. Now is clearly the best time to be considering all your investment property finance options. Increased sales are very gradually lowering the inventory of houses on the market, including short sales and foreclosures. So as this year goes on, stabilization of the market will see a slight increase in house values.
Other indicators showing a clear-cut flat-lining and bottoming out of the real estate market include first quarter sales results, especially in the Northeast. In this region, house inventories have remained steady, days on the market have been dropping slightly, and house prices have remained flat overall during the last few months. Compared to the precipitous price drops, inventory increases, and increased time on the market data of the last several years, a flat-lining of the market is good news indeed.
The ramifications for the property investor
So what does this all mean for the property investor? As I’ve been saying for months now, if you haven’t already decided to get into the market by either purchasing your first investment property, or adding on to your stable of properties, then this is the time to do it. You need to get in before prices start rising. All signs point to the second half of 2012 as a continued slow recovery period. However, it is expected that 2013 will start to see some serious price increases occurring in the real estate market across the country.
So clearly this is the time to get in on the investment property bandwagon, as prices remain at their relatively lowest point in years. The bottom has definitely been reached. And you should be exploring all your investment property finance options now. Whether you decide upon utilizing conventional mortgages, FHA 203K renovation loans, owner financing or hard money lenders, the window is slowly closing on making good deals on investment property while they remain priced at historically low levels.
photos courtesy of thegreenhouseproject.org, csmonitor.com, prospect.co.uk, ocregister.com, guardian.co.uk, quickenloans.com