Real estate looks promising for 2015. The winter market tends to be quiet, but inventory is growing and prices are heading up. According to Lawrence Yun, Chief Economist for the National Association of Realtors, “With interest rates at lows not seen since early 2013, the strength in existing-sales in upcoming months will largely depend on the willingness of current homeowners to realize their equity gains from the past couple of years and trade up.”
The signs are positive: Consumer confidence is up, the job market is expanding, less expensive mortgage insurance is available, and new low down payment programs are coming into the marketplace.
The total existing-homes sales in 2015 are forecast to be around 5.26 million, an increase of 6.6% over 2014. The national median price for 2015 is predicted to increase 4 to 5%.
Foreign buyers are still active in the market place. In Atherton, CA, the very high-end market is dominated by the Chinese and that trend is expected to continue. Specifically, homes priced at over $20 Million should expect 70% of the buyers to be foreigners. Real estate may be the best investment you will ever make. Let’s evaluate if you should buy, sell or hold in the months to come.
For the first time since early 2012, home buyers are not saying that the lack of inventory is slowing their purchasing efforts. In fact, the supply of homes is likely to increase this year as more homeowners have enough equity to sell.
The concern now is affordability. In a Redfin survey, 32.6% of homebuyers indicated that “affordability in the area where I want to buy it” is the biggest obstacle of a home purchase. Just 11.3% said that the biggest obstacle was “not enough homes for sale”.
As one buyer said, “If you can’t afford any of the homes for sale, it doesn’t matter how many homes are on the market.” Interest rates remain low. If you want to buy, we need to evaluate all the homes in your favorite areas, know the seller’s level of equity, and learn the seller’s motivation.
As inventory grows, some sellers will see the competition and decide that the best way to sell is to pass on a deal to the buyer.