“Which way did he go, which way did he go?” 

I know, kind of weird I’d do a Bugs Bunny reference – but that is the first thing that came to mind when I hear the “experts” talk about the market that we’re going to have this year and beyond.  I hear predictions from “credible” sources of 12-18% appreciation in 2014, with roughly 6% in 2015.  I’ve heard 4% with zero in 2015 (granted that was from a firm that was trying to get a discount on a purchase price).   As many of you know my opinion falls in the middle – I think we’ll be about 8% this year (2014) and 4% in 2015.  In other words I’m predicting a healthy and reasonably sustainable market. 

So, when will be see the 8% appreciation?  Believe it or not in some areas we’re already seeing it.  I just sold a home for 5% higher than I saw the value.  But I’m also seeing homes that should fly off the shelves that haven’t moved yet.  I’d say we’re not in the fully matured spring market yet…but we will be very, very soon.

For my buyer clients, I’m recommending they should RUN to the deals; especially if they have a house to sell, but don’t need to sell right away.  In other words, buy a little low, then sell after we get the bump in the market. 

The interesting dilemma for sellers is that the inventory is increasing, so if you have a tougher property.   it may sit for a little while before it sells (even with the prices going up).  We are still very much in a seller’s market.  There is approximately two months of inventory in King County (balanced is 3-4 months).  However last year in April we only had a little over one month of inventory.  So, while we now have double the supply from last spring, it’s still less than it should be.

Just to give you a little perspective: with a typical buyer I’ll do a price search and historically find 70 properties.  In the current market, it isn’t uncommon to see just twelve.  So part of the challenge is finding the right home in the limited inventory (hence the reason some of the new listings end up in bidding wars).

Anyway – a bit crazy…but crazy can be fun.  The one promising note from every single expert I’ve heard from and talked to expect this to be a good year, and none expect 2015 to be a bad year.

However, the wild card could be interest rates.  Most industry analysts expect interest rates to go from 4.25% to 5.5%+ by the end of the year.  This will definitely impact the refi market, so if you are still considering a refinance or have a purchase on your radar…best hustle.

Cheers.

Cory