Real Estate nest Egg
Some owner are still on the fence about selling their home thinking that with continued rise of home prices, they might be better off selling in 2015 rather that 2014. Well, according to Sam Khater, deputy chief economist for CoreLogig, “the weakness in home sales that began a few months ago is clearly signaling a slowdown in price appreciation”. He added “The 10.5 percent increase in April, compared to a year earlier, was the slowest rate of appreciation in 14 months.”
“Home prices are continuing to rise as we head into the summer months,” said Anand Nallathambi, president and CEO of CoreLogic. “The purchase market continues to suffer from a dearth of inventory which we expect will continue to drive prices up over the yea
Excluding distressed sales, home prices are expected to rise 0.8 percent month over month from 1.0 percent month over month from April 2014 to May 2014 and by 6.3 percent (+/– 1.5 percent)** from April 2014 to April 2015. The CoreLogic HPI Forecast is a monthly projection of home prices built on the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.
As we have previously written the Fed’s plans to raise interest rates has already sidelined many possible buyers who were still interested in making a purchase in 2014. We also believe that the rise in home prices is artificial mostly affected by the shortage of inventory that helps fuel the rise of home prices.
These are alarming signs of a frothy market ahead of us which led to a housing crash in 2006. We hope we are wrong, but if we are, we would have you have taken some money off the table by selling some of your Silicon Valley homes.