As 2014 is coming to and end, we’ve seen another year of low interest rates, increased housing affordability and double-digit house appreciation. It seems that the seller’s market conditions that we have become used to in Silicon Valley are becoming the ‘norm.’
How will things shape up for 2015? Here’s a quick prediction by Freddie Mac:
“If you are planning to buy a home in the next year, it’s better to do it sooner rather than later,” Frank Nothaft, Freddie Mac’s chief economist, said in the video commentary embedded here.
Since Freddie Mac sees interest rates increasing, with an average around 4.6% next year, it’s cheaper to purchase a home now with lower mortgage interest rates than when rates begin to rise. An increase of just 1% in rate can mean the difference of spending nearly another $100,000 in total interest over the first 10 years of the loan!
But rising rates don’t necessarily mean that our housing market will cool off; the job market and consumer confidence are up concerning homeownership, and Freddie Mac sees continued appreciation trends through the next few years nationally. Locally in Silicon Valley, we’re probably looking at another year of double-digit, or close to, appreciation for most communities fueled by the high affordability buyers have in our marketplace. And with our local tech-giants continuing to expand and grow their employee-base, housing choices will only continue to slim.
Contact me for a further discussion regarding the 2015 real estate market outlook in your community.