As 2013 comes to a close and real estate experts forecast where the housing market is headed in 2014, here is a look back of the trends from 2013.
1. Housing Prices Rose Faster Than Expected
According to Trends Vision by Metrolist, the median sold price for a home in Tracy was $278,000 in January 2013, and it has since climbed to $345,000 by November 2013. The pace of price appreciation accelerated significantly over the year.
2. Mortgage Rates Rose Remained Low
We expected mortgage rates to rise in 2013, and they started to increase in the late spring, but they're still very affordable when you look at rates on a historical scale. They aren't the super-low rates we saw in the past few years. According to Freddie Mac, 30-year fixed-rate loans were as low as 3.45% in December 2012 and rose to 4.49% in September 2013. It is forecasted that mortgage rates are likely to stay low and perhaps even drop between now and mid-2014.
3. Bidding Wars Returned
The combination of rising prices, low mortgage rates, and low inventory led to a sense of urgency among buyers and the return of bidding wars. According to Realtor.com, inventory in 2012 reached a high of 2,083,710 homes on the market, then declined to 1,583,497 homes in February 2013. By the end of the September 2013, 2,210,000 homes were for sale, approximately five months of inventory.
4. Housing Affordability Remained High
Housing affordability has slightly come down this year because of home value appreciation and the lack of income for the consumer to keep up. Even though affordability is at a five-year low, it's still the fifth-highest in the past 30 years.
5. All-Cash Buyers Continued to Be a Strong Market Segment
Nearly a third of all home purchases were made with cash. This trend has been consistent for three years prior. Some cash buyers are from overseas and some are institutional investors, while others are your smaller market investors who have had trouble obtaining financing for such activities previously. Even owner-occupant buyers are cash buyers because of the tight underwriting standards as of late. Some people are getting help from relatives to buy, and they plan to take a home equity loan to repay them.
6. Mobile Apps Accelerated Connections Between Buyers, Sellers and REALTORS
Nearly every Realtor and brokerage in the county introduced a mobile app this year to make it easier for buyers and sellers to access information from their smartphones and tablets, including the KW Smart Phone App. Everyone realizes that a desktop can sometimes be inconvenient when looking for up-to-date Tracy Real Estate information. According to the National Association of Realtors, 68% of homebuyers used a mobile app during their home search and 89% used a mobile search engine at the initiation of their home search.
7. Rising Rents and Pent-Up Demand Pulled More First-Time Buyers Into The Market
We are currently seeing a replenishment of renters who want to buy homes instead. In 2002, nearly 70% of people owned homes and 30% were renters. That has declined to 65% of people are home owners and 35% are renters. Rents are rising rapidly than home prices in some markets. There is an increasing demand from people who don't want to live with their parents and who want to buy a home.
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