Top four differences between 2013 and 2014
Last year, 2013,
was a roller coaster year in real estate with prices going up, inventory going down, and people left with uncertainty of how and when to buy or sell a home.
With all that said, you can’t make good decisions for the future if you don’t learn from your past. Q.
What are the top four differences between what happened in 2013 and what is projected to occur this year? A.:
Those differences are price gains, mortgage rates, the buying pool, and inventory.
• Price Gains
From October 2012 to October 2013 we exceeded predictions as we saw price increases nationally of about 14 percent (in South Florida we saw a 15.8 percent increase during this time period). We haven’t seen a price gain like that since February 2006. What’s in store for 2014? There are forecasts of price increases in the single digits from 4 to 6 percent.
And what does that mean for you? As a seller, sell while the market is hot. And as a buyer, buy if you can and while you can. • Mortgage Rates In 2013 we saw rates starting in the 3-percent range for a 30-year-fixed and moving upwards of 4 percent. In 2014, we are starting in the 4-percent range and projecting to move upwards of 5.5 percent
What does this mean for you? As a seller, price your home to sell. As prices and rates increase, more people are going to pull out of the buying pool as they will not be able to qualify or it simply will no longer make sense for them to purchase a home. As a buyer, it’s time to make moves to lock in a great rate and not miss out on your window of opportunity. • The Buying Pool In 2013, we had a buying pool made up of first-time homebuyers (28 percent), cash buyers (31 percent) and investors (19 percent). In 2014, we will see firsttime homebuyers dwindle with higher rates and prices, investors pull out because they are no longer seeing a return on their investment, and repeat homebuyers moving into the game now that they are seeing positive equity in their current home and can actually sell their home and qualify to buy another. • Inventory Inventory was at alltime records lows in 2013, leaving you with a “Hunger Games” strategy to go out there, fight the battle of a “bidding war”, and beat the competition to get your offer presented and accepted.
In 2014 we will slowly see more inventory on the market with new construction (which will also slow down drastic price increases) and fewer buyers in the game.