According to Frank Nothaft, Freddie Mac vice president and chief economist, the outlook for housing looks promising. He’s quote as saying: “We’re getting mixed signals as we start the spring home buying season. Tight inventory may pose a significant challenge for home buyers in many markets across the country, which may result in higher home prices and sales being lower than expected. This is good news for those markets that have room to run on the house price appreciation front, but it’s also going to increase the affordability pinch in many markets, especially along the country’s east and west coasts.
Two indicators that are supporting local housing activity are rising consumer confidence and declining unemployment rates.” Both indicators that Mr. Frank Nothaft sights in his optimizing for the housing are alive and well in Silicon Valley where the tech-fueled boom is contributing the reduction of unemployment. In fact, most Silicon Valley CEOs complain about the lack of qualified talent pool to help them grow their companies.
This report also validates the nagging shortage of inventory in some markets including Silicon Valley where if you have a place to escape, it might be a good time to sell your home in 2014. Specially given the rising interest rates which will push some buyers off the market since they will not qualify for Jumbo loans required to purchase homes in Silicon Valley.
We didn’t need this report to become convinced of the market’s heat since last week we lost with a full price cash offer on a Monte Serreno home listed for $1.55M which sold for $1.69M with a 3 day escrow! That’s $140,000 over asking price which can easily buy a extra retirement condo in Florida for this seller who was happy with $1.55m.
Would you sell your home if you could get $140,000 more than your asking price?