We are all hoping to see an increase in the value of our homes this year, and there are certainly some solid indicators that 2015 will be a strong real estate market.
Our general area has seen a rise in home values. Here are some observations and an outlook for 2015:
-Property tax assessments for Montgomery County rose 11.5% over the last several years.
-Median price in the DC area increased 1.4% from 2013 reaching the highest level since 2007.
-Low inventory levels continue with less than a 6 month supply of homes for sale which helps support higher prices.
-However, first time home buyers were far below the historical norm of 40%, making up only 29% in existing home sales nationwide. Having a smaller pool of first timers limits the ability of existing home owners to sell their homes and move up.
-Equity predictions nationwide are for a 3.6% increase in 2015 and 3.2% in 2016. Unlike the “boom” years, avoiding bubbles is a good thing for the market, allowing homeowners to accumulate equity while buyers still have the ability to buy.
-Interest rates are predicted to rise, possibly to 5% by the end of this year, impacting purchasing power. A person looking right now to have a monthly payment of around $1850 could afford a $400,000 home, but if rates rise to near 5%, they could only afford $360,000.
-FHA is lowering their mortgage insurance premiums by a half percent, which will reduce monthly payments by hundreds of dollars, making it easier for first time buyers to purchase.
Please consider us your resource for all things real estate. If you are refinancing, want a recommendation on a home warranty, need a service or just have a home related question, please give me a call at 301-910-9910 or email me at firstname.lastname@example.org.