Experts across the country agree that there was a recovery in the real estate market in 2013 and that is certainly what Wellesley experienced. Our October 2013 results were the highest since 2006, a remarkable feat given that the economic uncertainty due to the government shutdown almost eliminated any market activity for half the month. Overall, 2013 was characterized by brisk sales, bidding wars and eager buyers.
What will 2014 bring? The quiet that we typically experience in the winter months will probably not occur in winter 2014. The 2014 'spring' market has had an early start with tight inventory looking like it will again be the main story of the year. Determined buyers who have not succeeded because of the low inventory in the summer and fall seasons are actively touring each new property that comes on the market. Mortgage rates, although higher than they were six months ago, may be lower than they will be this spring.
Both Redfin and Zillow predict that home prices will rise anywhere from 3% - 5% in 2014. If this occurs, it is likely that more homes will be put on the market. The tight inventory that dictated so much of the 2013 real estate activity will hopefully return to more traditional levels.
Mortgage rates are also expected to rise in 2014, maybe even as high as 5%. If this happens, it will likely spur home owners who have been on the fence about selling their home to enter it in the market. Higher mortgage rates will slow refinancing which will ultimately make getting a loan much easier for buyers, especially new buyers. Even if rates rise to 5% though, experts are quick to assert that's still a low mortgage rate. "Prior to the Federal Reserve's 2008 decision to buy $85 billion in debt per month, the 36-year average was 9.2%, and never below 5.8%" points out Glen Kelman, CEO of Redfin.
The other predictions for 2014 include: fewer homeowners will be underwater, affordability will decline, ownership will decline, Americans will move, foreclosures will fade and the home buying process will be less crazed.