Well friends, it’s been a roller coaster few years in the real estate market. The good news is that the market has been rising and falling over 7 year cycles for about 40 years now. And 2008 – 2009 was undeniably the bottom. Which means we are at about year 5 in the cycle, a definite upswing period.
2014 marked a great stabilizing year for La Jolla. With a decrease of short sales and foreclosures artificially driving home prices down, prices normalized. And while the inventory stayed low throughout the year, you saw homes sell with positive equity. All positive signs that last year was a transition year for an incredible 2015.
And with the New Year, we have a bright future in the real estate market! Here are several things you can expect in 2015.
Increased Inventory
Many of sellers have been sitting on the fence, waiting for the market to recover before listing. Well this is their time!
Foreclosures have burned off. Flipped homes are fewer and farther between. And home values have recovered. Which means you are starting to see the shift to a seller’s market again. And as the tide starts to turn, we will see an increased number of homes added to the market.
Rebounding Rents & First Time Home Buyers
With the rise in home property values, rents have already started to hike. Over the last 6 months alone, San Diego saw an average of 6% rent increases. That’s an increase of almost $90 a month.
Ouch.
As rent prices creep farther above average monthly mortgages, renters will take to home ownership. CNBC is predicting that first time homebuyers “will probably exceed their 40 percent historic average in terms of participation.”
The Trifecta
The stars have aligned to have a powerful first two quarters. The job report is strong, oil prices dropped and interest rates are still low. While rates are expected to stay low throughout the beginning of the year, there is talk that they will start to rise toward the end of the year. This means more money in people’s pocket and incentives to buy
Expect an uptick in buyers moving up in lifestyle, as well as empty nesters downsizing.
La Jolla Will Be Hot
One of the biggest shifts in La Jolla will be the return of the second home purchase. Compared to high-end real estate in other popular locations, such as New York and San Francisco, La Jolla is inexpensive. Combine that with the gorgeous weather and proximity to the beach, and houses will go fast.
Conclusion
All the signs point to a great year for real estate in 2015. With an increase in inventory, buyers will be out looking to make a lifestyle change. And while the trend will be toward a buyer’s market, the first two quarters will be a sweet spot for both buyer and seller.
If you are looking to take advantage in the shift in the market and increased inventory, contact me today 619.980.2738! We can grab a cup coffee and discuss your options!