Happy New Year to the Friends and Fans of Lifestyle Real Estate Services.
It’s that time of the year when we all get introspective about our lives, the year that has passed, and the year that is to come. It’s the time most of us make new commitments to things we want, and make “resolutions” to get them. I’m always struck by how many cars are in the parking lot at the gym right after the New Year. I laugh about it, but I also get frustrated by the limited access to equipment I want to use. It doesn’t take very long, though — three weeks, four weeks at the most — before things settle back down to normal. The “newly resolved” lose their resolve; humanity takes over.
It’s been an incredible year in San Francisco Bay Area real estate. Nearly every area appreciated, with some homes gaining 50% in value! A study by CoreLogic showed that, nationwide, over three million homes went from negative equity to positive equity this year. The reason was short supply — there were very few homes for buyers to buy! Great properties coming on the market caused a bidding war this year, normally selling for more than their asking price.
Think of this past year as “January at the gym;” it was crazy, crowded, and temporary. Next year looks to bring more typical Bay Area appreciation, along with a normal amount of homes for buyers to buy. There are a couple of reasons for this change; first is the fact that interest rates have, and will likely continue to, rise.
The second will come from an increase in foreclosure properties coming on the market. In an effort to “cash in” on the recent appreciation, we’re told Fannie Mae will be releasing $10B (yes, that’s “billion” with a “B”!) in assets nationwide in the coming months, setting investors up for fantastic bank-owned opportunities that have been missing from the marketplace for a while. Here’s hoping this additional inventory will serve to stabilize the market, and not cause another crash in prices.
Any regular gym-goer will tell you, staying motivated past the end of January takes a commitment to invest in one’s fitness goals for the long-term. So I would challenge you, if you are in a place to think long-term in your investment goals, strongly consider picking up an investment property or two in 2014. There will be less competition, better properties for sale, and great opportunities to take advantage of the newly-established rental market here in the East Bay. Here at Lifestyle, we are getting in front of as many banks and asset managers as we can with the hopes of earning their foreclosure listings to bring to market. As our investor client, we will help you sort through the best properties for the greatest opportunities.
Whatever you resolve for the New Year, we hope it’s your best year yet. We challenge you to find the inner strength to dig deep and reach for your goals, and we offer our best wishes to you for a prosperous, and happy, 2014.