The good news for housing in 2014 is that price gains are expected to be only about half as strong as in 2013, when inventory levels created a market tipped in the Sellers’ favor. For a sustainable recovery, David Stiff, chief economist at CoreLogic Case-Shiller says that a more balanced market between buyers & sellers is more desirable. Case-Shiller forecasts a 6.8% rise in the median home value in 2014.
Inventory is already improving nationwide. Locally we have about 24,000 homes on the MLS for sale, which is about double what we saw in the 2nd quarter of 2013, showing that we are “ahead of the game”, beating most areas of the country toward an expected shift in the Market. In November, indicators noted that the increasing supply of homes and decreased demand by buyers, concerned by rising interest rates and political uncertainty, brought a shift from being a Seller’s Market to a Buyer’s Market within a short time period. Investors are less of a factor as well, due to rising home prices and fewer distressed homes, which they covet.
Buyers who are waiting to buy will have more homes to choose from but will have a price to pay for the delay – the 30 year fixed rate mortgages are forecasted to climb from today’s 4.5% to more than 5% by the end of 2014. A couple of things that can help Buyers as they move forward with a home purchase in 2014 is to be realistic about the offer you make for a home; make sure they have good credit (new QM…Qualifying Mortgage requirements mean a lower debt to income ratio in the new year), and work with a good local lender who have ties to nearby appraisers & have a track record of meeting closing date deadlines.
Owners wanting to refinance should remodel within reason (bathrooms & kitchen provide the most “bang for the buck”) and possibly take advantage of low interest home-equity rates which are once more available to homeowners with equity in their home.
Sellers just coming in to the market can also plan ahead to make sure they position themselves correctly to not leave gains on the table by listing to early or losing out on buyer demand by waiting to long to list. Price it right the first time & use a realtor who is in tune with the market.
Please call me for more information or if you are ready to buy or list your home. 602-739-0095