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Health & Fitness

Looking Ahead to 2014!

The real estate market made an encouragingly strong comeback in 2013 spurred by a combination of low inventory and low interest rates.  We saw home values rise significantly which was welcome news for sellers.  Though with limited properties on the market, it was tough for buyers.  So, what are various analysts predicting for 2014?  We've compiled some of the top predictions made by those who watch real estate....

1.  Inventory should gradually stabilize.  Last year homeowners waited for proof of a solid economy and most stayed out of the game waiting and watching.  Now that prices are expected to continue their gradual but steady increase, experts predict more people will be encouraged to sell.  Many of those who were underwater now may be in a position to finally sell their homes.  New construction is also on the rise, bolstering the inventory's return to traditional seasonal levels.  As 2013 closes, inventory is already approximately the same as a year ago!  So that's good news for buyers as it means more homes from which to choose.

2. Prices should rise modestly.  Home values are expected to increase anywhere from 3-4% next year, which is at a slower pace than last year's unsustainable rise.  Modest price increases are still good news for those looking to sell, but the bottom line is that homes will be more expensive to buy in 2014 than in 2013.  Declining affordability will be difficult for some first time buyers looking to make the leap from renting. But repeat buyers, who will see equity increases in their current home, should be able to fill the gap.

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3. Interest rates expected to rise in 2014.  Some sources forecast borrowing rates reaching as high as 5% by the end of next year.  Since the economy has been strengthening, the Federal Reserve will likely begin to taper off it's bond buying stimulus program which will result in rising rates.  Luckily, if we do a long-term comparison of rates, mortgage affordability is still quite favorable and will remain so for some time.  That said, if you never refinanced during this period of very low rates, we'd recommend refinancing now before you miss the boat and rates inch up further.

4. Getting a mortgage will become easier.  Despite the expectation of higher rates, some good news with regard to mortgages is that financing should prove easier to secure.  With less demand for refinances due to the higher rates, lenders will have to make up lost business by competing for new buyers and hopefully loosening their lending standards a bit.  In addition, the new mortgage rules going into effect for banks in 2014 will clarity the legal and financial risks they face with different types of mortgages, hopefully making banks more willing to lend.

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All in all, we feel upbeat about 2014 as it looks as though the market will shape up to be a good one for both sellers and buyers!   We are always happy to meet with you and discuss how these trends will impact your specific situation.

Contact Sharon or Kevin at Mendosa-Balboni & Associates Fine Properties.  978-341-5400.  http://www.mendosabalboni.com/ 


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