What is Going to Happen to the Housing Market Next Year 2014

Real Estate Agent with Keller Williams World Class BRE# 01874717

What is Going to Happen to the Housing Market Next Year 2014

At just about every get together, and especially every holiday party this year, I get stopped and cornered for a question and answer session on what is going to happen to the housing market next year 2014.  I expect these quizzes and really enjoy sharing various statistics, industry trends, and the actual current market conditions in Agoura Hills, Oak Park, Westlake Village and Thousand Oaks.

The discussion can be from the very surface to the deep numbers, depending on the audience.

Generally speaking, in my opinion, there are 3 major factors to pay attention to next year that will affect the housing market right on its face.

1.  Interest Rates.  The government bond buyback program (i.e. quantitative easing) has been ongoing for over two years and has had the expected result of keeping interest rates low and in check. The government has been purchasing approximately $85 billion in bonds a month to free up bank balance sheets and allow them to lend more more at lower rates, with the fed fund rate charged to banks remaining at zero. Various experts have predicted an interest rate increase through 2014 to around 5.5% as the government begins to taper this program.What is Going to Happen to the Housing Market Next Year in 2014

2.  Housing Demand.  Everyone can see it. The demand for housing remains incredibily high as the 2013 year home price increases have brought out a significant number of under water homeowners back into some equity and they are making a move. However, in certain areas, inventory still remains low as people are in a bit of a wait and see approach to how 2014 is going to turn out. Especially with the Federal government issues and Obamacare.

3.  Interest Only Loans.  There were a large amount of interest only, high loan to value loans that were placed between 2004 and 2007. The loan terms were typically 5, 7 or 10 years in length. We have seen the stress in the past of the 5 year interest only loans coming due but have yet to see the 7 and 10 year interest only loans that will be expiring between now through 2016. These loan programs will likely not be available in the same design they were in the past and will bring about a potential inventory of homes for sale in order to get out of that situation.

The above is the framework for most of my holiday discussions this year. We are very excited about what 2014 holds in store and expect a vibrant housing market regardless of interest rate increases.

What is very interesting is that the various factors affecting the housing market right now begin to equalize themselves and create sustainable market conditions.


What is Going to Happen to the Housing Market Next Year 2014


This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Real Estate Market Trends
California Los Angeles County
Keller Williams 'Rainers
Posts to Localism
Local Expert
Addicted to Active Rain
HyperLocal Neighborhood and Community Posts
housing market 2014

Spam prevention
Show All Comments
Peter Pfann @ eXp Realty Pfanntastic Properties in Victoria, Since 1986.
eXp Realty, Victoria BC www.pfanntastic.com - Victoria, BC
Talk To or Text Peter 250-213-9490

Thanks for your perspective on the 2014 market, we are very much affected what happens in the US so we hope we will fare a little better next year.

Happy Holidays and a Pfanntastic 2014

Dec 22, 2013 12:56 AM #13
Brian DeYoung
Howard Hanna Real Estate Services - Ithaca, NY
Brian DeYoung

the best time to buy, is usually NOW. Simply because Real Estate is always your best investment.

Dec 22, 2013 01:19 AM #14
Geoff ONeill
John L. Scott Medford - Medford, OR

FHA loan limits are changing.  This should have a negative effect on certain price ranges.

Dec 22, 2013 01:57 AM #15
Jay & Michelle Lieberman
Keller Williams World Class - Agoura Hills, CA
Creating Calm in the Buying and Selling Chaos

Bill:  You are correct about January as they just announced that. Interesting that the stock market increased on the news due to the fact that it was a smaller tapering than expected.

Lenn:  I love statistics.  Can't get enough.

Michael and Bruce:  It all is really an "educated" crap shoot based on current data and past history.

Andrew:  I actually got a question the other night about how the market is in Canada. Wish I knew.

Rosie: Cheers to you.

Dan:  Agreed.  Great lead in to get what I want after I dispense my local knowledge.

Amanda & Jared:  We can only look at what is in front of us and history to predict the future.

MaryKay: All the data is pointing in that direction.

Rob:  I think the QM rules, etc (Dodd Frank stuff) now actually being applied by the banks may actually create a more stable market in the future as long as government tries to stay out of the balance of the market.

Richie:  Cheers.

Jean & John:  I tend to disagree with doom and gloom predictions.  A significant factor that affects a housing market is perception.

Peter:  Cheers to you Peter.

Brian:  Real property is scarce by its nature which is what makes it one of the most valuable assets available and what creates such continued long term demand for it.

Geoff:  You are correct on the FHA issue.  As well as the rumors about the future overhall of Fannie and Freddie. 

Dec 22, 2013 02:40 AM #16
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

So what is the market going to be like in 2014? Best of luck to you and I wish you the best in the new year

Dec 22, 2013 03:06 AM #17
Irv Shnidman
Great Post. I agree. But what about the prediction of if there will be more units sold in 2014 than 2013?
Dec 22, 2013 05:06 AM #18
Irv Shnidman
Great Post. I agree. But what about the prediction of if there will be more units sold in 2014 than 2013?
Dec 22, 2013 05:13 AM #19
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

If interest rates do rise, the prices of housing will have to come down because the economy, in general, is not as stable as we think and has not fully recovered, IMHO. Nice post about the future short-term in real estate.  We'll have to check back a year from now to see if these predictions were accurate. 

Dec 22, 2013 06:35 AM #20
Richard Daskam
Keller Williams Coastal Properties - Signal Hill, CA
Your Real Estate Consultant

Don't we ALL want to know about 2014!  I know several people, including myself, with a 10-year IO rolling next year.....we will see......

Dec 22, 2013 06:48 AM #21
David Spencer
Keller Williams Northland - Kansas City, MO
Show Me real estate in Kansas City

After 35 years, I can assure you that the next year is always differenct thean the last. Production is what is accomplished after adjusting for changes in the wind.

Dec 22, 2013 07:43 AM #22
Ed Silva
RE/MAX Professionals, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

I have heard economists projecting the low rates through 2016, and it would definitely help our area

Dec 22, 2013 08:16 AM #23
Will Allen
Concept 360 Property Management - Long Beach, CA
Property Management... taking care of your assets

Thanks Jay...  well thought out, on target post...  I too am guardedly optimistic

Dec 22, 2013 11:11 AM #24
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

I like your summary for 2014. There are many factors but I agree that 2014 is going to be a great year for real estate. 

Dec 22, 2013 06:00 PM #25
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

In Sacramento, our inventory will most likely continue to be low, which means fewer homes will sell, and there will be fewer buyers for those homes as well, which means more competition among agents for the business. I expect my business will remain level.

Dec 22, 2013 10:50 PM #26
Andrea.B Ferreira 954-303-8289 CRS
Keyes Co. - Davie, FL
Miami Dade, Broward and Palm Beach County in FL

I liked your posted, and I would added the unemployment rates went down. that will be another good domino effect to 2014!

Happy Holidays !!!

Dec 23, 2013 05:20 AM #27
Jay & Michelle Lieberman
Keller Williams World Class - Agoura Hills, CA
Creating Calm in the Buying and Selling Chaos

Charles:  Best wishes to you.  We can only make educated opinions.

Irv:  I believe there will be more units available as some interest only loans will be coming due.

Carla:  I would agree normally that increase in rates will bring down values. But IMHO I believe the demand is much stronger and will offset that interest bite a bit.

Richard:  Maybe the new lending rules coming out in Jan will help being that the banks at least know how the government is allowing them to lend and under what conditions.

David:  LOL. Every year is better or worse by some margin.

Ed:  I am hearing everything pointing to the opposite, higher rates in 2014 and there on.

Will and Pamela:  keep the faith!

Elizabeth:  You may be suprised by the potential for additional inventory if rates do increase and those IO loans start funneling into the market.

Andrea:  Happy holidays to you.


Dec 23, 2013 08:29 AM #28
Steven Nickens
Elite Pacific Properties Maui - Wailea, HI
R(S)GRI ABR, Maui Real Estate Hawaii

Great article, I hope the rates stay down in 2014, we will see.

Dec 23, 2013 09:08 AM #29
Jimmy Faulkner
Florida. Homes Realty & Mortgage - Wantagh, NY
The Best Of St. Augustine

People need too eat and have a roof over their heads and that is why home prices will continue to rise. A corrupt gggovernment and banking system is the cause of the   downward swing.

Dec 23, 2013 11:42 AM #30
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

I hope your 2014 will be fantastic and you have a very Merry Christmas.

Dec 23, 2013 09:36 PM #31
Jay & Michelle Lieberman
Keller Williams World Class - Agoura Hills, CA
Creating Calm in the Buying and Selling Chaos

Steven:  We have already seen a small blip up in rates on the news late last week that the Fed will be tapering the bond buy back just slightly.

Jimmy:  Housing is a bit like napkins. People will always need it at some point.

Debbie:  Happy holidays to you!

Dec 24, 2013 01:10 AM #32
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?


Jay & Michelle Lieberman

Creating Calm in the Buying and Selling Chaos
Shoot Us a Question About Anything You Need...
Spam prevention

Additional Information