2014 Market Updates and Projections

Daily Real Estate News | Monday, February 24, 2014
The 2014 home buying season is off to a strong start with year-over-year increases in housing inventories and “sustained growth in home prices,” according to the latest National Housing Trend Report from realtor.com®, which reflects data of 143 markets across the country.
The number of properties for sales edged up 3.1 percent in January while the median age of inventory basically held steady, indicating a “less frenzied market” than in January 2013, realtor.com® reports.
This is “an encouraging sign of sellers’ interest, particularly given the adverse conditions brought on by the polar vortex,” says Errol Samuelson, realtor.com®’s president. “We saw the tight-supply market of last fall carry all the way into November – later than is typically expected – and this early rise in inventory is a welcome trend.”
While inventory levels were up across most parts of the country, markets that have been badly hit by the “polar vortex” – recent harsh frigid weather conditions – tended to see some of the biggest declines in month-over-month inventories. Denver posted one of the largest month-over-month inventory declines at 13.5 percent, followed by New York, Philadelphia Boston, Detroit, Chicago, and Detroit that also saw declines. “These markets may experience notable inventory recovery after prohibitive weather conditions subside,” realtor.com® notes.
Overall, 83 of the 143 markets that realtor.com® tracks – or 58 percent – showed increases in year-over-year inventories.
“While the next few months will be critical to watch, these trends suggest a more balanced housing market going into the 2014 home buying season,” realtor.com® notes in its report.
Realtor.com® says that it will be important to watch markets like Denver, Boulder, Chicago, and Corpus Christi, Texas, which have had some of the most sluggish housing inventories in the country but also some of the largest year-over-year gains in median list prices. “Sustained low inventories in these markets could lead to demand-driven housing price increases that characterized California and most of the sand states in 2013,” according to realtor.com’s report.
The median list price nationwide moved up in January, rising 8.3 percent compared to year ago levels, according to the realtor.com® report. The markets posting some of the largest year-over-year increases in median list prices – of 20 percent or more – include California, Detroit, and Nevada. jmcswain

As I was reading Randy's comments above, I was reminded of conversations with some program students in Denver that I have spoken with in the past few days. Properties are moving rapidly on the MLS and they are frustrated in finding properties to make offers on. The funny thing to me is that they sounded exactly like some people in California that I spoke with several months ago. The reason it is funny to me is that the people in California are no longer calling in with the same frustrations.
Runs on properties tend to be short-term, and tend to center around MLS listed properties. If you are in an area that is frustrating you, remember that it is probably going to change within a few months. In the meantime, you will need to be more creative in the ways that you search to find properties. The less you are dependent on the MLS as your sole lead source the more you will be finding properties that are not in the mainstream of most people's consciousness, especially investors. And the more hidden deals you will find. Try going to my blog on this website by following the link below and reviewing my post called "51 Ways to Find Properties."

Dallin & Randy, very interesting, helpful info. Here in San Diego the problem is the same though not as bad as in San Fran, there is a lot of land & space but if you want to be in downtown San Diego where I am then you have to pay a premium so most families & folks with a median income avoid downtown. Singles, professionals with a lot of disposable income & seniors-retirees live here mostly since there is not a lot of space & the condo's here are expensive.

I love living here it is so beautiful & there is a lot to do, just Tue we had mardi gras here with snoop dog handing out tequila shots to the crowd & there is always is a lot of night life in the Gaslamp quarter & the bay offers a lot of running paths & boating or just walking. It is awesome.

So question? What do they do in San Fran & other areas to help with this crisis? I imagine the market will correct itself eventually right? Ordinarly people cannot afford these places or even just home's in general in a lot of places, so what does the govt or the market do? thanks.

Tony, you are bringing up an important issue that occurs in areas where home appreciation accelerates beyond reasonable levels. Many people are left behind. Solutions usually require cooperation between government and entrepreneurs to provide reasonable housing.
It usually requires people to commute from longer and longer distances, unless some program for affordable housing can be passed, or government can provide other subsidies and assistance.
Although it is painful to state it this way without emotion, the economy will eventually correct itself if things go out of balance, and many people will be victims financially to those corrections. Silicon Valley, for example, has crashed before.
I think that we as people have a responsibility to each other, rather than just a need to amass wealth. Even a black hole, they have discovered, will eventually cease to be a hole. The universe abhors vacuums, and will find a way to eliminate them.

Mortgage Market Review
Week of March 16, 2014

Mortgage rates bounced around again last week, as international issues resurfaced amid nominally decent US economic data. Concern for the ongoing crisis in the Ukraine continued to drag markets downward. A report showing some sluggishness in Chinese manufacturing also created some market jitters. Here in the US, however, we received some slightly good economic news. Retail sales managed to creep upward by 0.3%, and weekly unemployment claims dipped to 315,000. Some important economic data is due this week, including Industrial Production and the LEI. However, the Federal Reserve is also meeting this week, with new Fed Chair Janet Yellen leading her first meeting. Another round of tapering of QE3 is expected, but markets may not react much to that news. More importantly, Yellen may begin to change some of the ways that the Fed provides guidance. The more tools she lays out for how the Fed will manage monetary policy, especially if it appears she is preparing to move toward tighter policy, the more likely that rates could move upward.