TOP 5 CALIFORNIA REAL ESTATE TRENDS TO EXPECT IN 2014

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

real estate trend

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.”

FEWER INVESTORS

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

Provided by:

  • Kari Cross
  • Intero Real Estate
  • 925-584-1640
  • kcross@interodb.com

CALIFORNIA IS LEADING THE U.S. OUT OF THE HOUSING BUST IT STARTED

The Bloomberg News posted an article on October 14, 2012 that shows promise for the California housing market and it echo’s what I see as a local Realtor.

SAN FRANCISCO — California, the state that led the nation into the housing boom and bust with some of the most reckless subprime mortgage lending, is now leading the way out.
A plunge in new defaults in California helped push U.S. foreclosure filings to the lowest level in almost five years, according to RealtyTrac Inc., a seller of home-loan data. Across the country, 531,576 properties received notices of default, auction or repossession in the third quarter, down 13 percent from a year earlier and the lowest since 2007. One in every 248 households got a filing, RealyTrac said.
California, the birthplace of subprime mortgage lending, saw an explosion of foreclosures thanks to such industry innovations as “no-doc” loans that required no proof of income. The state’s recovery is mirrored by U.S. home values that rose 1.2 percent in July from a year earlier, according to the S&P/Case Shiller index of property prices in 20 major cities. It was the second straight 12-month advance and the biggest jump for the real estate gauge since August 2010.

“We’re starting to see improvement in some of the hardest hit areas, strong demand, competitive bidding on properties and rising prices,” Sean O’Toole, chief executive officer of ForeclosureRadar.com, which tracks sales of foreclosed properties, said in a telephone interview.

The gains are moving in tandem with foreclosure declines as lenders control the flow of bank-owned homes that come to market, crimping inventory and pushing up prices, said Daren Blomquist of Irvine, Calif.-based RealtyTrac.

Initial filings in September fell in 31 states, led by California, the most-populous U.S. state, which dropped to a 69- month low. Defaults dropped 45 percent from a year earlier, 34 percent in Arizona, 22 percent in Michigan and 21 percent in Georgia, RealtyTrac said.

Home sales in California’s biggest population centers climbed in August to the highest level since 2006, according to real estate research firm DataQuick. Median house and condominium prices in six Southern California counties jumped 11 percent from a year earlier to $309,000, while values in nine counties in the San Francisco Bay Area gained 11 percent to $410,000, the San Diego-based company said.

California home sales probably will increase 1.3 percent to 530,000 units in 2013 for the third consecutive year of gains, the Los Angeles-based Realtors group forecasts. Estimated sales of 523,300 in 2012 would represent a 5.1 percent jump from 2011.
“Pent-up demand and first-time buyers will compete with investors and all-cash offers on lower-priced properties, while multiple offers and aggressive bidding will continue to be the norm in mid- to upper-price range homes,” according to Appleton-Young’s forecast.

If you are on the fence about buying or selling a home, make sure you contact your local Realtor and know what is happening in your area.  Don’t let the market pass you by.