In the past few years the housing market has had many changes and RealtyTimes recently predicted some of the top housing trends for the California Real Estate market for 2014:
- Mortgage rates will go up
- Home values and prices will increase
- Fewer investors buying up properties and more buyers looking for primary residences
- Seller’s market will continue but cool off
- Home buyer’s need to start searching
INCREASING MORTGAGE RATES
Mortgage rates are predicted to rise, but not too far, up to 5% or 5.25% in 2014. The
Federal Reserve will begin tapering soon and the greater the reduction in Federal government purchases, especially of Mortgage Backed Securities (MBS), the more rates are likely to grow.
It’s a great time to buy now because mortgage rates are still below the historical average so if you’re thinking of making a move, 2014 is the perfect time to jump into the market and start looking! With low rates and increasing home values, now’s the time to buy in order to make a smart investment for your future.
Speaking of mortgages, home buyers also need to be prepared for stricter qualifications on home loans. Come January 10th lenders will be required to prove borrowers’ ability to repay a loan according to new “qualified mortgage” standards. An important statistic to keep in mind is the maximum debt-to-income ratio of 43% that borrowers will need to qualify. The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, has also announced plans to reduce the maximum loan limits for conventional conforming loans some time in 2014.
If you are considering buying a home in 2014, contact your local Realtor now to make sure you know how these changes will affect you.
INCREASING HOME PRICES AND VALUES
Predictions show that home values and prices will rise in 2014. Moderate predictions are clocking in at a 6-8% increase for California markets whereas others foresee a 10-15% increase.
According to Bill Plattos, Execute Vice President of First Team Real Estate, “2013 has begun the upward progression of the real estate market in California. In the next 3 to 4 years prices and sales will continue to rise bringing us back up to a peak.”
Investors swoop in when home prices bottom out like they have in the past few years, seeking foreclosed homes and short sales to snatch up. However, as our economy strengthens and home values come back up in 2014 there are fewer distressed homes on the market to interest investors. The rise in home values in and upswing in the economy will also make it easier for current home owners who’ve built up equity to afford a down payment and enter the market in search of a bigger and better home to fit their needs.
Fewer investors also means less price competition and fewer bidding wars for buyers shopping for primary residences. 2014 will be the prime time to buy and sell for home owners who are ready to move on to a better neighborhood, larger home or location offering a more convenient commute.
CONTINUED HOME SELLERS MARKET
The seller’s market will continue in 2014 for California and on a national level. However, it will be much cooler than the one we’ve witnessed over the past two years. “The market will get closer to normal – or as normal as the market can be,” says Plattos. “It will continue to cool and inventory will come up to a moderate level, not too low or too high.”
HOME BUYERS NEED TO START SEARCHING
With the seller’s market leveling in 2014, that means buyers need to be realistic about the home they can afford. Home buyers, now is the time to start searching the best deals in real estate in order to get the most for your money.
IF YOU ARE PLANNING TO MAKE A MOVE IN 2014
CONTACT A REAL ESTATE AGENT TODAY
- Kari Cross
- Intero Real Estate