12/10/2013

It's the end of 2013, and time to get ready for 2014
By now you may have heard about the lack of homes on the market, and how many buyers are competing with each other.  This is not only in California, but in many markets nationwide. 

So what are the reasons for buying now, in spite of this?

  • Even though the total sales for 2013 is about 2.1% less than the 2012 level of California sales, the median home price has increased statewide by 28% over 2012, at $408,000.
  • A percentage point increase in interest rates, from 3.5% to 4.5%, further reduced affordability.  In spite of this, interest rates are still at historic lows, making a buy in 2014 still important to pursue, because a half percentage point fluctuation in the mortgage rate changes the payment by $100 per month on a median priced home of $415,770. Most of the predictions for 2014 put the 30-year fixed rate mortgage at 5.3 percent.
  • New lending rules are going into effect January 2, 2014, which will raise the cost of borrowing because of the new ability-to-repay rule and the new definition of a qualified mortgage are raising the cost of originating home loans.

What is in the buyer's favor right now is that these conditions, starting in the Fall, have helped the market cool off a little, with some houses sitting on the market for a longer period of time.  Make this your opportunity to try again, if you weren't successful the first time.

Please contact me for more information about the area you are interested in.  If you are using certain online "databases" to conduct a home search, keep in mind that some of these actually use properties that are not really listed, they may be a for-sale-by-owner, and that at least one site that many buyers think is a public database, is actually a real estate broker to which you agree to certain conditions when you use their site (Redfin).  To easily search properties that are active listings and are not stale, please go to Long Beach Homes and Condos.

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