Are you in the market to buy a home in 2014? Are you frustrated with the shortage of suitable homes to purchase? Well, there might be some home since the rise of list prices for Bay Area home has been slowing down since April 2013.
According to Truila Price Monitor, List prices of homes have risen 10.4% year-over-year in February 2014 which has dropped slightly after peaking in November 2013. But the year-over-year change is an average of the past twelve months and therefore obscures the most recent trends in prices.
Examining quarter-over-quarter price changes instead, it’s clear that price gains have been slowing for most of the last yea where asking home prices rose just 1.9% in February compared with increases near 2.5% from July 2013 to November 2013 and over 3% from April 2013 to June 2013.
This means that the mortgage rate increases that were fueled by the announcement of Fed’s plans to stop buying mortgage backed securities in Summer of 2013 has already slowed the real estate demand by pushing some of the 1st time home buyers out of the market.
Ironically, what had fueled the speculation of home prices were the ever present 1st time home buyers which created a healthy demand for Silicon Valley homes. But the imbalance between the supply and demand continues to get worse since the market is still suffering from acute shortage of suitable homes for sale despite the tech fueled employment recovery.
But not all is well is Silicon Valley’s employment recovery. In fact, on May 3, 2014 Tesla had to cancel the planned Job Fair at the Fremont factory due to huge crowd of applicants. Fremont police was called to restore order since the traffic jams had impacted the highway 880 traffic nearby Tesla’s plant.
So, not all is well with the employment picture and the housing pictures is also looking rather worrisome for some folks who might have over-paid for their purchase in the past year.
What are your thoughts about Bay Area home prices? Will they recover from the recent decline? Will the decline in home prices continue? We would love to hear from you.