Krista’s Top 10 Forecast for 2014

What is in store for real estate in 2014?

1)  Last year was an amazing rebound year, with many areas seeing 20% – 30% appreciation.  California Association of Realtors believes that statewide we will see a 6% appreciation over the next year.  Locally I believe that we will see a little higher than that, possibly in the low double digits in some areas.

CAR Housing Forecast

CAR Housing Forecast

2) Many more cities will surpass their previous peak.  Currently Berkeley is the only city to have done this, with Pleasanton and Walnut Creek trailing behind.

3) Inventory levels should improve but it may take the entire year for us to reach a normal level.

4) Distressed properties are becoming less of a factor, although for the first time in months I have seen more foreclosures on the market.  Not nearly as many short sales.

5) Increased buyer demand and increased prices will force an investor drop-off.  I know a lot of investor groups and it is becoming harder and harder to make the numbers work.  This is good and bad: good because it reduces buyer competition and bad because investors help first time buyers purchase “turn-key” homes

6) Interest rates are predicted to go up, but not much.  Even at 5% rates are still deemed amazingly low.

7) Buyer frenzy will be in full force throughout the beginning of the year, prompting sellers, who now have equity, to think more about selling

8) Multiple offers will continue to exist in many desirable communities with houses flying off of the shelf.  Last year most houses sold for 10% – 20% above this list price- this will continue.

9) We will see less contingent-free offers.  Last year there were so many offers that did not have any contingencies, even offers with loans.  I think sellers are becoming a little more lenient and agents are become a little smarter, explaining to their sellers why it is important for the buyer to be able to inspect.


10) As rents continue to increase Bay Area renters will turn to becoming first time buyers, making purchasing a home more affordable than renting.