I have made many predictions over the years and sometimes as luck and circumstances would afford, I was right on the money. In the San Diego Housing Market however, much of my prognosis for 2015 is made with the benefit of many others opinions already forecast.
Such as the easing of credit qualifications for new home buyers. News of the Fannie and Freddie Review of qualifiers already discussed the somewhat easing of those credit qualifiers with slightly lower credit scores and less down payment being considered.
We also know that there are over 450,000 residential home buyers in California that are still under water. The Federal and state tax forgiveness provisions in the tax code have been extended by Congress prior to Christmas this year. So I expect with prices flattening out, there will be an uptick in the number of short sales for 2015.
Speaking of prices, I think we have hit a plateau that will vacillate a little but overall not much increase in prices ( maybe 3 or 4 % over the year ) or gained equity in 2015.
I predict that more and more home sellers will use professional stagers to improve the salability and desirability of the homes. Many more with upgrades suiting today's taste for move in ready and upgraded Kitchens and Baths.
I predict that Sales will be slow in the first quarter and pick up over the 2nd and 3rd quarters. However, as the Fed eases the efforts to keep interest rates low, I think it would be fair to predict that at least initially it will slow homes sales some. But then, as always, the demand for housing will keep pace with 2014.
New Construction starts will increase in 2015 as the overall economy allows. The biggest issue San Diego has is that land and construction costs are still increasing and any thinking that things will get more affordable is out the window. The building fees in San Diego are some of the highest in the US so home builders have little room for negotiated pricing. It just gets more expensive to build.
The demand for rental housing continues to increase. There is no softening of demand expected and rentals remain outrageously high. The days of under a $1000 for 2BA and 2BA don't look they will re-appear anytime soon. Certainly not likely in 2015.
The overall housing forecast for 2015 is a mixed bag but there will be plenty of activity for home sellers. But prices will remain sensitive and market demand will fluctuate throughout the year.