2014 – Another Strong Year What’s in Store for 2015?
Last year can be described as a very strong year for 92078, in real estate terms. While our county recognizes modest appreciation of 5%, San Marcos home values grew by 10%, with our own 92078 zip code coming in at over 12% for the year. Of course, this is on top of 14% growth in 2013, for a compounding growth of over 27% in value over the last two years.
Continued low mortgage interest rates kept buyers active, although the number of homes sold dropped 11% from the previous year at the county level, and a whopping 15% drop for 92078. This is not totally unexpected as we had a surge of buying activity in both 2012 and 2013, as home values grew compared to the prior years during the market decline. Most of the reduction in selling activity occurred during the last four months of 2014, while activity during the spring and summer was strong.
One sign of stability in our market is the reduction of foreclosures. As an example, just last month there were 138 home foreclosures throughout the county. This might seem like a significant number, but not when compared to the numbers we were experiencing during the height of the market correction in 2008, where foreclosures were in excess of 2,000 per month.
Another sign of stability is in the decreased number of Short Sales recognized in 2014, representing just 18 of the 425 homes sold in 92078, or just under 4%. Compare this to the 28% we experienced in 2012, and we can see that distressed sales are no longer a significant drain on our average values.
So what should we anticipate for 2015? Well, many believe that while mortgage rates should rise from their near record low, the overall borrowing rate will remain relatively competitive. Fed Chairman Janet Yellen has repeatedly stated that she recognizes the role played by the housing market in the overall health of our economy, and it will continue with their efforts to nurture a slow “unwinding” of mortgage rates.
In relation to overall home prices and values, economists feel that home prices will show modest appreciation in 2015, in the middle single digit range. And if interest rates continue to remain competitive and keeping buyers motivated, middle digit appreciation is very possible.
CPA & Realtor • BRE# 01377312
7030 Avenida Encinas Suite 100, Carlsbad, CA 92011