What Can You Expect in 2014?

I hope you had a happy New Year! Today I wanted to recap what happened in 2013 and also let you know what to expect in 2014. From the beginning of 2013 to about May, it was a feeding frenzy of multiple offers and skyrocketing prices due to the low inventory in the San Fernando Valley. In that five month period, there were only 1,700 properties for sale; towards the end of that run, there was less than one month of inventory and in some places, only 20 days of inventory. What completed the feeding frenzy was that interest rates were under 4%. From the beginning of 2012 to the end of 2013, most parts of the San Fernando Valley saw anywhere from 35-40% price increases.

In the middle to end of May 2013, we saw a jump in interest rates. This causes buyers to freeze what they were doing yet historically, interest rates were at all-time lows. Rates fluctuated in the fall and winter of 2013 before the Government announced they would no longer buy the bond cause rates to close the year at 4.5%

Looking towards 2014, we expect healthy gains and a more “normal” market if the interest rates rise slightly and hinder the buyer’s affordability. I do expect rates to be up slightly until the end of the year and into 1st quarter next year.  I don’t foresee significant increases in rates until sometime in 2015.  Much of this taper talk was more a question of what if and when. Also, now that the Feds said they will start the process in small increments, I think we know what to expect to some degree.

I still feel there should be a sense of urgency on the sellers part because if rates tick up even more, there will be a lot less buyers.  Not to mention, the guidelines seem to be tighten up further into 2014 making it tougher to qualify for a loan.  Prices could stall until the economy significantly improves.

Thank you for visiting my video blog! If you are a buyer, check out our free MLS property search and if you are interested in selling, check out our free home value report. Please call me at (818) 720-9922 or email me at Scott@ScottWorks4u.com. Have a great day!