Is This Spring the Right Time to Buy?

With the housing crisis still looming in our rear view mirrors, many potential buyers are unsure as to whether they are ready to move full throttle into to the housing market this spring. Some consumers have gotten so used to waiting for the “bottom to drop out” in their areas that it is difficult for them to recognize the signs that are now tentatively pointing towards a long-awaited recovery. Here is some of the positive news that may make buyers finally jump off the fence this spring:

1. Housing Affordability is at an all time high

According to the California Association of Realtors, the percentage of homebuyers who could afford to buy a median priced, single family home rose in the fourth quarter of 2011 to the highest number that has been seen since analysts started tracking the statistic in 1988. This means that thanks to lower home prices, record low interest rates, and the tax benefits of home ownership, many buyers may find that it actually costs them less to buy a home than it does to rent.

2. Housing Inventory is at a five year low

2012 started out with a great boost in home sales. The National Association of Realtors reports that February home sales – which can sometimes be sluggish due to the winter weather – were 9.2% higher than February of 2011. Buyers are finally coming out of their hibernation and the increased demand is pushing inventory levels to a five year low. Because of this, promising homes that come on the market at appropriate list prices are now being swept up quickly by buyers who don’t have much to choose from, and Realtors are seeing more and more multiple offer situations. With a higher demand and a lower supply, home prices are finally starting to rise and buyers are realizing that it is time to stop waiting and get into action.

3. Sellers are finally getting the message

Perhaps the greatest hurdle for would –be buyers to overcome during a housing slowdown is the stubborn seller. Homeowners who bought during the height of the market and are now lucky to break even have been slow to accept today’s lower market values. Luckily for spring buyers, more than half of the Realtors that participated in a new Coldwell Banker survey now feel that sellers are finally beginning to accept the realities of the market and are willing to price their homes competitively. This means that houses will sell more quickly and sellers who have been scared to list their homes may feel more confident about putting their homes on the market.

With 40% of all annual home sales taking place in April, May, June and July, spring is always the busiest season for home buyers. However, with this year’s buyers and sellers both feeling more positive about the market, the spring outlook is especially sunny.