Canyon Lake Real Estate Trends Issue CL01

Real Estate Trends ISSUE NO. CL01 JANUARY 2014 Keeping you up to date with useful real estate news and intelligence Real Estate is Hot Again! After 6 years of sub par performance, the real estate market is finally coming back - with a vengeance . Mortgage Corner Mortgage rates are rising... should you buy now? Many consumers believe there is an inherent bias toward the real estate community when we state it is better to buy a home now. For that reason, we want to quote a third party source today. Forbes, in their online edition last week, spoke to the importance of buying a home now rather than waiting. The article, Should You Buy a Home Now or Pay More Later?, explains: “With mortgage rates creeping up toward 5% as 2013 draws to a close, potential home buyers have some decisions to make — and soon. I t’s hard to believe that it’s been over 6 years since the real estate market started it’s downward spiral that helped contribute to one of the worst economic downturns in U.S. history. If you’ve been in your home that long, then you may have cringed like I did as you watched your equity and value plummet while homes were foreclosed and short sold all around you. Many lost their homes and much of their equity. Some have still not recovered. Hopefully you’ve landed on your feet by now and maybe even begin to build equity again. The good news is that real estate turned the corner in 2013 and saw it’s strongest gains in the last 6 years. Value and Volume Up Prices started perking up back in mid 2012 and shot up dramatically in January of 2013. Since then, it’s been month after month of increasing volume and price. A look at the chart above on the left shows that in the last 24 months, the median price of sold homes has risen from $240,000 to $336,000. That’s a 40% increase and most of that has happened in the last 15 months since about July of 2012. The danger for potential home buyers isn’t that mortgage rates are nearing 5.00%; the real threat is that rates could go higher, to 5.50% or even 6.00% in 2014.” The chart on the right shows that available homes for sale has steadily decreased over an 18 month period to nearly half of what it was near the peak. The article spells out the financial consequences a buyer would face by waiting: $67,746 on a $300,000 mortgage. This simple illustration of supply and demand really shows the increase in buyer activity that has helped bring the real estate market back They’ve gone on to identify four things a buyer should take into consideration before delaying a decision to purchase. 1. What can we expect in 2014? Likely the return of a more normal market with more normal appreciation somewhere in the neighborhood of 5-8%. The days of 25-30% appreciation are probably over... and that’s a good thing for the health and longevity of the market. -JB Prudential Becomes Berkshire Hathaway Home Services For just over a year now, the Berkshire Hathaway Home Services Brand has been building momentum throughout the real estate world. Most Prudential offices have made the switch to become BHHS affiliates including our own. As of December 19th, our local office previously known as Prudential Canyon Lake Realty will join the Berkshire Hathaway family of companies and now be known as Berkshire Hathaway Home Services - California Properties. Because of the strength and reputation of the Berkshire Hathaway family of brands, you can expect to see more visibilty and better tools to help you whether you are a home seller or home buyer. You can also expect the same level of service, performance, and trust that Prudential has always provided under our new moniker. 2. The Federal Reserve will stop “tapering” causing rates to return to historically normal levels (6-7%). 3. Home values are rising 4. “2013 saw the return of multiple offers and bidding wars as inventory was tight and buyers were back in the market.” Rates will likely rise — and soon with 5% interest rates right around the corner. The autumn buying season is underrated “as you can take advantage of year-end tax breaks and the fall weather makes it an ideal time to move”. Bottom Line The financial advice Forbes gave to their readers was rather simple. Buy now or pay more later!! Information provided by The KCM Blog. http:// Dave Fitzpatrick Wallick and Volk, Temecula 27708 Jefferson Ave. #105 Temecula, CA 92590 Ph: 951/296-6066 Fax: 206/203-3924 NMLS #259057, Licensed by the Dept. of Corporations under the California Residential Mortgage Lending Act. License #4130785. Corporate NMLS 2973. Notice: This is not an offer to lend or extend credit. All loans are subject to credit approval.