Do You Remember What a Crazy Year it Was?

What a wild ride it has been this year! When we began 2013, we had seen less than a months’ supply of homes, multiple offer scenarios and a bit of recovery in the market. Boy, did things change during the first quarter! We saw home prices appreciate 15-20% and by the end of the quarter, we saw pricing structures similar to 2004-05. In fact, we sold two homes last year that were priced higher than they were in 2005. Needless to say, there has been amazing recovery in the market and things seem to remain strong.

There are still also droves of buyers flocking to the market and not nearly enough properties for all of them. However, inventory levels are increasing and we are starting to see less and less of the bidding wars we saw in the second quarter of 2013. Prices are starting to rollback and sellers aren’t able to ask whatever they want for a property and get away with it. I can see this trend continue through 2014 and inventory rising in the spring. This may cause price reductions in the second quarter of 2014 which means that could be the best time to sell your home in the coming years.

My prediction is that we will see a 5-15% drop in pricing towards the end of the year as interest rates are predicted to rise to as much as 5.5%. This is how the market keeps itself balanced. For every percent that the interest rates go up, a 10% drop in pricing must occur; in other words, this is to keep the monthly payment the same.

Our prediction for 2014 is a strong first quarter followed by a slowing in the second and third quarters with serious price reductions closing out 2014 as interest rates go up. This means the beginning of the year is a great time to sell your home and if you’re thinking about buying, you want to do so before interest rates go up. Waiting will not be on your side in 2014!

I want to wish you the best in 2014 and if you need anything, don’t hesitate to call. Make it a great day!


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