A Piece of the Rock: Ashley’s Predictions for 2014

Everybody wants a piece of the rock.” A fundamental rule of human nature from prehistoric cave people to modern day urbanites is that every human being instinctively wants a place they can call home; a place where they can celebrate their victories and shelter in when besieged. Everybody wants a safe, secure base of operations and I predict that this drive for the security of a home will dominate the Market in 2014.

Now that government shut down fears have been quelled for the moment and confidence is quickly being restored locally, 2014 should provide a near-perfect market for sellers. Our rapidly reviving economy combined with low inventory and the perception that conditions for homebuyers may not be this good again for a long time will drive people who’ve been sitting on the sidelines into the market.

NAR chief economist, Lawrence Yun, says that “the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014.” He predicts 30-year fixed-rate mortgages will be at 5.4 percent by the end of 2014, up from the current rate of about 4.5 percent. Home prices are expected to rise steeply as well.

There will be several reasons for this rise. Renters are becoming disenchanted with renting. Up until very recently renting was touted as the “new normal” for Americans, but now, as rental rates have risen, more and more renters seek to become owners. As renters enter the market, the increased demand combined with low inventory will push prices up. This low inventory situation is likely to continue through 2014 due to a lag in new construction and a scarcity of land to build on in our area. The Fed’s retreat from subsidizing mortgage loans will push mortgage interest rates up as well.

In addition, many short sellers have already successfully short sold which means less drag on the market appreciation. Some former short sellers who sold their homes two or more years ago are becoming buyers again. Hundreds of thousands of owners who were underwater on their mortgages have finally recovered positive equity in their homes. Now they are in a position to sell their homes and move up without having to pay off negative equity.

The appeal of homeownership has not faded. In the future, homeownership will continue to be the way most Americans amass wealth. In addition to providing a built-in savings plan as homeowners pay down the principal balance on their mortgages each month, homeownership provides intangible benefits that other investments cannot match. After all, you can’t raise a family in a stock portfolio!

A recent national survey predicts that:

  • Home values will appreciate by 4.3% in 2014.
  • The average annual appreciation will be 4.2% over the next 5 years
  • The cumulative appreciation will be 16.8% to 28% by 2018.

Recent performance suggests that real estate in our area can be expected to appreciate at a far more rapid rate; the Case-Shiller Index reports a 7% home price increase for the Washington DC area over the last 12 months.

This is one of your last opportunities to cash in on the sweetheart deal of the new century. With interest rates starting very low out of the gates this year, the time to enter the market is now! Later in the year, you can expect mortgage rates and home prices to rise. You must move quickly to take advantage of this sweet spot in the real estate market. Having an experienced Realtor® who can guide you through the process is essential in this time of rapidly changing regulatory and market conditions.

Linton Hall Realtors’ Ashley Leigh Team offers comprehensive services to buyers and sellers that help to ensure that all transactions are speedy and trouble-free.

Sellers will benefit from using the services of an experienced Realtor® such as Ashley who sells a home every day of the year and possesses the hyper-local knowledge needed to effectively price and market a home.

Buyers need to be prepared to act quickly so they can lock in on the lower interest rates and home prices. You can be the first to the deal through Ashley’s exclusive, computerized reverse prospecting system, which matches listed properties to prospective buyers. Ashley’s team also can provide you with extensive databases and mapping applications that make it possible for you to prospect for new properties right from your tablet or mobile phone. Prospective buyers also need to obtain pre-approval from a lender. Ashley Leigh is in constant contact with all of the area’s lenders and he can guide you through the loan process.

Don’t miss out on this once-in-a-lifetime opportunity! Call the Ashley Leigh Team at 703-940-0744 or e-mail us at [email protected].

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