The autumnal equinox tomorrow begins my favorite season for real estate: Fall.
Spring has a frenetic pace of activity, and summer slows with family vacations, but fall has a pleasant mix of higher inventory and low mortgage rates that make it one of the best times of the year to buy or sell property.
The weather is comfortable for home tours and fall holidays help a house look dressed for the occasion.
What can we expect for the housing market this fall?
Nationwide, the Federal Reserve says the housing market “lost traction” during the first half of 2014, with underperformance in residential construction and low household formation. It is true that 2014 looks a little ho hum compared with last year’s, double digit price appreciation and near record inventory lows. The frenzy of 2013 gave way to a more balanced housing market for 2014.
Buyers gain edge
Prices over the past three years have been a roller coaster for buyers and sellers, depreciating in 2011, jumping by double digits by the end of 2012 and spiking over 20 percent in 2013.
Price growth flattened out this summer and we are experiencing a subtle shift in pricing power from sellers to buyers. More inventory and longer market times have encouraged some sellers to lower their price expectations to a more realistic level.
A few properties that hit the market highly upgraded or in choice locations are drawing multiple offers and selling over list price, but more often there is room to negotiate. Listing price reductions should boost sales as homebuyers who have been waiting for better deals are rewarded for their patience.
Demand for housing remains strong and we could see a surge in sales before the holidays. Buyer traffic through open houses remains steady, and many are more confident about making a home purchase without the worry of multiple offer competition, bidding wars and tight inventory.
Mortgages excellent
The mortgage market remains extremely attractive with conforming rates hovering around 4.375%. Jumbo mortgages over $417,000 are available as low as 4.25% on 30-year fixed.
Cash buyers still dominate the market. First-time homebuyers are struggling with the high cost of real estate in our SoCal marketplace, but are diving in wherever possible, often turning to condominiums and townhomes as single family home values are out of reach.
We have seen a significant rebound in condo/townhome prices in 2014 thanks to young and downsizing homebuyers.
