2014 is here! What to look for in Real Estate this year.
January 06, 2014Your Christmas decorations may still be up but the start of a new year is always filled with much anticipation and goal planning, a fresh start for whatever we have decided to get done this year. We can at least be relieved that the days are going to start getting longer and the nights shorter from here on out, that in itself should be cause for celebration. From a real estate stand point, here's how 2013 closed out and what's being projected for this year.
The start of 2013 was a flurry of activity as demand for properties by home buyer's and investors rose quickly. With low inventory, housing prices increased rapidly as most sales found themselves in bidding wars. According to the California Association of Realtors (C.A.R.), almost half of all homes sold in 2013, about 49.5 percent, were sold above asking price. More than 72 percent of the homes sold received multiple offers, with an average of 5.7 offers on each home. Investors accounted for 19 percent of all home sales.
Housing inventory this year is still low; therefore housing prices will continue to rise. Buyer's who weren't able to purchase in 2013 will still be looking as well as new buyers entering the market. Projections by the C.A.R. sees sales gaining 3.2 percent this year to reach 444,000 units, up from the projected 2013 sales figure of 430,300 homes sold. While median home price in California increased 28 percent in 2013 ($408,600), it is projected to increase about 6 percent this year, making the median home price about $432,800. As for financing, C.A.R projects that the average for 30-year fixed mortgage interest rates will rise to 5.3 percent thereby remaining at historically low levels. Take a look at C.A.R.'s 2014 forecast chart below.
On Jan. 1, the Federal Housing Administration established new loan limits. For FHA insured loans, the limits went from $729,750 to $625,500. This is the first time full loan-limit calculations will have been implemented under the Housing and Economic Recovery Act of 2008 (HERA). The higher limits that had been in place for the past 6 years were originally implemented as emergency measures to make sure mortgage credit was available at a time when private lending was limited. These new lower limits had been scheduled to take effect in January of 2009 but were delayed by Congress several times as a result of the continuing strain on credit markets. About 650 counties will now have lower FHA insured loan limits.
All things considered, in 2014 the housing market will stabilize even further as housing inventory increases and balances out the demand for homes. It is still a great time to buy, as mortgage rates are still at historical lows and also a great time to sell since housing demand is still high. Whatever your goals may be for 2014, I wish you the best of luck and success! Happy New Year!
Jeana Boulos is a local real estate professional living in Valley Center. Feel free to contact her for any of your real estate needs at 760-517- 6316 or firstname.lastname@example.org. Visit her website at www.boulosrealty.com. CA BRE #01923953