Barron’s had a great article 12/28, Saturday night that will serve as a prompt for this post, entitled, “Betting on the House“. Things have been busy, busier, and bright with old-fashioned holiday spirit. As the new year rolls around, I’ll post my 2013 summary and 2014 predictions here to serve as a bench-mark of sorts.
2013 saw more all cash purchases than most years. Some industry critics think this was inflated — I can tell you I saw them first hand in the most unlikely of places, as well as the expected places. And while at some point the equity increases everyday owner occupied’s have gained should point to a slowing of the ‘all-cash’ offer, I’ve yet to see this. My market is SoCal — busier than most markets, has more variety, more ups and downs, more activity, and more more than most places, but as Victorville, Apple Valley, and a few other obscure but profitable markets toward the east beckon and boom, and housing starts continue to rise, we are continuing to see surprises everyday.
A few surprises the city of trees saw in 2013 included the offering and purchase of two long-held public spaces sold off to support the need for a static segment: condo developments. I anticipate possibly another of those for 2014 locally, and we may see this kind of development across our established, upscale communities as we broaden our spectrum, address long-held needs, invite others in, and increase accountability and transparency.
I expect we’re in the midst of switching from a sellers’ market to a buyers’ market, though it will take some communities much, much longer to arrive at a buyers’ market, mine included. Inventory is still indescribably low for my town, my clients are still being outbid, and some listings are still getting over asking price. Spring should bring more cautious sellers out of the woodwork, interested in taking a sigh of relief at having made it out alive, and ready to take advantage and put their gains to work toward their dreams. The influx of inventory by June should offer buyers more leverage than they’ve had the last year, and we may begin to see different paperwork to reflect the fact that buyers will be able to ask for things again. The open house will certainly take on a new air of importance, and it will continue to be ‘back-to-basics’ for agents who weren’t able to learn their trade during the fast times nor understand the lessons of the hard times or were too new to catch either of those waves.
This post is tending to lean toward the moment and project quite far into the future. While we’re all starry-eyed and at the end of the holiday season, we’re all so eager to jump into the hyper-zone of promises toward the overly optimistic fulfillment of 2014. We’re not there yet. I expect we haven’t seen the last of the short-sale,though so many who have been teetering on the edge now have equity, that many of those sales look like standard sales. As well I don’t think we’ve we seen the last wave of accountability arriving on the market from lending. And we’ve talked so much about the Q-financing changes, that only those who’ve already implemented the changes will be able to walk smoothly into 2014 without a hiccup.
Long and short of it: I’m betting on the house also. 2014 will have it’s fair share of ups and downs, and I expect they will be sharp, short, and local. In comparison to 2013, ’14 will make more sense, and most will begin to make some dough and feel a little more normal. With that, let’s raise our flute, and toast — here’s to making 2014 prosperous, fruitful, and … sound.
And on that solid note, I should share here also, some exciting, profitable, and sound information announced recently, with ads starting in our local markets: Prudential California Realty has begun to introduce the new name — Berkshire Hathaway Home Services. It’s a good, stable, sound, sign with great focused investors.
The house is back. The market is back. And it’s a good sign. Let’s raise the Cabernet…
- Home buyers in Phoenix market uninterested, expert says (bizjournals.com)
- The plague of all-cash buyers: Massive market distortions being created by easy money policy. 42 percent of recent purchases recorded no conventional mortgage. (doctorhousingbubble.com)
- The big Rat and Mouse property price prediction list for 2014 (theRatandMouse.co.uk)
- GLOBAL ECONOMY WEEKAHEAD-2014 promises faster growth, but no leap forward (xe.com)