1) Interest rates may see some increases but will remain relatively low, which keeps mortgage payments low and affordable. In many instances, it is cheaper to buy a new home than it is to rent.2) Unemployment is inching down.
3) Buyers are making larger down payments than in the past when purchasing new properties. This will help prevent a bubble market, as buyers with more money invested are much less likely to walk away from their properties in the event of a downturn.
Ongoing headwinds include limited inventory conditions and stringent mortgage standards, both of which are expected to continue. Inventory has been at record low levels and demand from buyers will continue to be strong. The supply and demand rule will affect home prices and home prices will reach new records.As interest rates rise to their traditional levels, generally between 5% and 7%, you can expect prices to stabilize.
Silicon Valley will continue to outperform the rest of the state. Our local housing market will continue to be strong in 2014, reflecting the continuing economic recovery and the pace of IPOs and buyouts. The increase in hiring should continue through the year. The pace of home price appreciation will slow slightly this coming year, but rising prices, combined with rising mortgage rates, will affect affordability.
If you have a house to sell, it is an opportune time to sell.