January 1 is only a date on the calendar. It's come and gone. It's not a milestone that causes everything in the market to change. Yes, lots of statistics and predictions will come out around that date. However, the fact is the real estate market typically evolves rather than goes through major revolutions.
If you didn't jump back into the real estate market in 2013, it doesn't mean that you completely missed out. Yes, the national average cost for a house rose 13.6% in 2013. You may have missed the biggest real estate bull market in the last seven years. However, the game isn't over. Experts predict that national prices will increase another 5% in 2014. One good piece of news coming out of the November statistics is that sales increased by 0.2%. Not a huge increase but the numbers continue to go in the right direction.
The negative trend in 2014 will be rising mortgage rates. They will dampen the market but far from bring it to a halt. All of 2014 will continue as a bull market but the sooner you get in, the more money there is to be made.
The market isn't much different if you are looking to buy your primary residence or to invest. The bottom line for both is that the longer you wait, the more expensive it will become. Both for the purchase price and for financing. As the economy continues to improve, it's inevitable that both of these key real estate metrics will raise. So although January 1 is only a date on the calendar, knowing where the market is almost certainly going means it's time to make your move if you haven't already.
The common sense approach here is if you are looking to sell your house in 2014, wait a few months to gain a few more percentage points in the rising market. If you are looking to buy, you want to make your move as soon as possible to lock in the still low prices from the Great Recession that are fading fast.
If you're still renting at the end of 2014, you'll have a pile of cancelled rent checks that won't do anything for you at tax time. If you're writing mortgage checks, the interest, property taxes, and other expenses will lower your tax bill. Buying also means gaining ownership and all of the appreciating value. Buying a house is less expensive in most markets than renting and there is much more to it than just the monthly check to you write for a roof over your head.
Investors can expect to move into riskier strategies in 2014 for more profit at the margin. 2013 was about the rental market. Rents were going up while prices remained relatively low as foreclosures continued moving through the market and pent-up sellers unloaded houses they had wanted to sell for years.
2014 will be a sellers' market. Inventory is down. Some of the best opportunities have shifted from rentals to flipping (seller's market). Searching out lower priced properties that can be rehabbed for flipping is where the money will be at for investors. The game is back to finding motivated sellers with houses the retail market doesn't want. Then bringing the houses up to the standard that the retail market will pay full price for. Being able to offer seller financing in this market will make you a big winner.
For more insights to the 2014 real estate market, please check out this article: realtybiznews.com/2014-a-time-for-change-in-the-real-estate-market/98723164/
Author bio: Brian Kline has been investing in real estate for more than 30 years and writing about real estate investing for seven years. He also draws upon 25 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest in the Olympic Mountains with the Pacific Ocean a couple of miles in the opposite direction.