Housing Market Gets Triple Helping of Good News – But Is That Good for You
Category: Retirement Real Estate
February 26, 2014 — What used to be described as the “beleaguered” housing market has entered a new phase these days. This week it received more great news. But, if that is good for you as a potential buyer in the retirement housing market is another question.
First, according to the Standard & Poor’s/Case-Shiller price index housing prices in the 4th quarter of 2013 rose 11.3% compared with a year earlier. Home prices haven’t recovered everything they gave back from 2008 -2011, but they are getting closer in most markets.
Second, the Commerce Department reported that sales of single family homes surged in January. They rose 9.6% from the previous month, reaching their highest level since July 2008. Economists were particularly cheered with this report since it had been assumed that cold weather and higher interest rates were going to hurt the market.
Third, it looks possible that Congress might pass a bill that will soften the flood insurance rates that otherwise will soon drastically effect tens of thousands of homeowners. The bill, a move welcomed by home builders as well as home owners, would more slowly phase in the increases that were mandated in 2012 to bring the cost of flood insurance more in line with actual claims. Coastal areas like Florida are very interested in the passage of this bill.
Good news for retirement market?
Higher prices and an accelerated sales rate might not necessarily be good news for you as a person looking for a place to retire. Places will be scarcer and more bidders looking to buy – that doesn’t soound like a good thing. But there are possibly some positive here. Many builders stopped construction or greatly reduced the scale of their projects in the recession, while others went out of business. One silver lining is that builders are more optimistic, which means they will be building more houses. That means a greater choice and more inventory down the road. And, if they react to the changing tastes of the market, more likely they will be building the kind of home you might like to buy and live in.
As for the bill to phase in flood insurance increases, that would be very welcome news to existing home owners, especially if a provision to allow sellers to pass on lower rates to new buyers stays in the bill. However if you are a buyer of a home in a flood zone, you should be very cautious to find out what the new insurance rates will be down the road. It usually makes more sense to rebuild above the flood zone than to worry about your home being destroyed and having to pay prohibitively high rates.
Comments: What are you seeing in the housing market when it comes to costs and choices? Is it getting tighter, or about the same as it was? Are you effected by the 2012 flood insurance reform? Please share your thoughts in the Comments section below.
Comments on "Housing Market Gets Triple Helping of Good News – But Is That Good for You"
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We had to repost this article because of a glitch. Here are all of the comments associated with the original post:
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Robert: Well that all depends on who you listen to. If you listen to our present day government statistics (which in my opinion are tweeked to make people believe that all will be well) than I think one is very naive and has fogotten just how much our government and politicians LIE TO US ABOUT EVERYTHING.
There are others in the world that are predicting another housing bubble and maybe even an eventual collapse of the $$$. With our present American debt situation and current policies – I tend to believe another housing bubble is on the way.
Great thing about life is we have choices – which one will you choose is the question.
Robert
Sandy Z: Just put our house on the market in Maine where the market is beginning to pick up. However the weather, high property taxes, and unfavorable business climate all are huge drawbacks. We already purchased a building lot in SC. I am afraid that the new flood insurance may include the whole island on which our lot sits. We plan to build our retirement home with cash from the proceeds of our sale here in Maine. If we do not use a bank at all, is flood insurance required? We will not be on the waterfront and our lot is mid-island in a very dry area. Does anyone know if we can forgo the flood insurance?
DV: The banks require flood and homeowners insurance to cover the loan collateral. No mortgage, no insurance, the risk of loss is yours and yours alone.
linda: If your property is in a B, C or X flood zone, the bank cannot require flood insurance. You can check the flood zone for your property at FEMA’s website.
Bob H. says:
For me the rising prices of homes in Florida is relative to where I live now and want to sell, Northern VA. For most I would think the wave of property appreciation is lifting most values across the country. So I am hoping in three years rising prices will not be an issue. Number of available homes on the market is also something I am not too concerned with because here in N. VA. houses sell within 2-3 weeks on average, very transient area, in Florida more choices would be welcome especially new homes built to new building standards which comes to the third issue, flood insurance, for me that is a big question. Do not know exactly where I want to live in Florida but insurance costs will be a factor that I will seriously consider. I am thinking central upper half of Florida would be the lowest risk. But convincing my wife to forgo the beach for a pool may be tough. Anyone out there that can give me some info about insurance rates in Florida would be much appreciated.