Home Prices Up, Buyers Should Make Move before Mid-2014
by Ed Kunkel Jr., military Veteran and Realtor®
There has been a steady and modest 3% to 5% increase in average value for homes that sold where I am in Thurston County from last year. Added to this promising news are shorter market times and more market activity on average.
The average sold price for homes in Thurston County for 2012 was $231,614. So far for 2013, the average current sold price is $239,121. Comparatively, the average “days on market” for homes in 2012 was 92, while we have seen a significant improvement this year with 73.
What this all says is we have seen modest but steady improvement overall – great news for homeowners in this area! And chances are, the story is the same in your neck of the woods.
What should a consumer be gathering from this, might you ask? If you’ve been waiting to buy, it’s past time to get off the fence. As you wait for the market to improve, your purchasing power diminishes.
Take a look at what happens to your purchasing power when you also consider what rates will likely do next year: If you bought a home now at the median average of $240,000 with a zero down 30-year fixed VA loan, and a current competitive rate of 4.0% (4.22% APR)*, your payment would be $1170 per month not including taxes and insurance.
If you wait a year and allow the home to gain a modest value of 3% to $247,200 coupled with a projected higher rate of 4.50% (4.73% APR)*, your monthly principle and interest payment would be $1,279 – a possible $109 per month increase over today’s levels.
Fall and winter time are great seasons to buy in, and the market naturally brings the most serious sellers together with the most serious buyers – the time of the season is obviously not for the faint of heart.
2014 Housing Market Predictions
Here are some predictions I have for how next year is going to play out for our market. First, foreclosures and distressed homes will not be dominating the market anymore. They will still exist, but won’t weigh the market down as in the past.
Reasonable market values have been stabilizing over the past few years as we weed out more and more distressed properties from the market.
Additionally, new construction is going to be a big deal. The new homes market will greatly improve to meet the demands of today’s buyer. There will be something brand new available for every viable homebuyer’s budget.
When you price your home as a seller, you have to strategically plan the sale of your home to compete against new construction. This is all the more reason to hire a Realtor® to correctly price, stage, and incentivize your home for the best value and the quickest sale. Additionally, we will see more homeowners eager to do a move-up sale from where they are as market conditions improve.
All these indicators point to the fact that 2014 could have higher home prices in store.
Ed Kunkel, Jr. is a Managing Broker/Realtor® at Keller Williams Realty in Olympia, Washington. Visit Ed here. Ed’s Military History: Veteran – U.S. Army and Air Force Reserve; Highest rank, E5; 11 years combined military service.
*Scenarios based on 0% down, 740 credit score, property in WA, 30 year fixed mortgage with 360 equal monthly payments. These figures do not include taxes, insurance, or HOA dues and are for demonstration purposes only. Your rate may be different.