Following an accurate prediction for the 2005 national real estate market, the California Association of Realtors (CAR) Chief Economist, Robert A. Kleinhenz, penned a positive forecast for the national real estate market in 2006. This was featured in an article in a recent CAR periodical.
He predicted single-digit appreciation and continued demand for housing. Those predictions were backed up with examples of steady but moderate national economic growth, labor market growth and low inflation accompanied by favorable interest rates and long term demand for homes. However, many have been watching the local real estate market closely waiting for an indication that the Carlsbad market will turn in their favor. However, although the report announced positive changes, (read at www.CAR.org) it may take some time before we see something significant.
In some respects, it is a buyer’s market. Interest rates have remained favorable and continue to encourage a strong buying market in Carlsbad. The fixed mortgage rates have dropped to their lowest point since October 2005, while the Federal Reserve rate hike in December has shown little affect on the rates. The average 30-year fixed-rate mortgage hovers around 6 percent, with the average 15-year fixed mortgage rate at 5.75 percent. Inventory levels have remained high for a good part of 2005, giving buyers a number of housing choices and opportunities to negotiate a fair deal for themselves. Value remains the single most deciding factor, as buyers wade through an array of available housing choices before finally selecting their new home.
Attached Home Statistics
Currently, the attached home market is inundated with properties ‘for-sale’ and sellers are feeling the pinch of competition. For many years, condominium and townhome properties have enjoyed substantial appreciation. In some instances, the investment potential of an attached property has been superior to detached property, yielding the same amount of appreciation for less of an initial investment. One of the greatest tax breaks a homeowner can utilize is that of the 2 year capital gains tax incentive that allows married couples to sell their primary residence and not be taxed on up to $500,000 of their appreciation. With attached properties experiencing substantial gains in the last four years, homeowners can move their equity into a larger home that will allow them the ability to ‘stay-put’ in case the local real estate market softens in the short-term. This may explain why Carlsbad has almost 40% more attached properties on the market than the same time last year. The want for stability and comfort is paramount.
Single Family Home Statistics
The single family home market remains competitive, but has enjoyed less competition than that of the attached properties. During the 3rd quarter of 2005, inventory for resale detached homes were at a record high. Prices held, due primarily to the sellers' reluctance to lower their price in the face of competition. As we entered into the holidays of 2005, the number of homes began to lessen. However, the number of family homes for sale should increase as the year progresses towards the summer months and it will be interesting to see if average sales prices will continue to move upwards as the CAR economic report suggests.
Wrap-up
In short, prices hold steady in the face of larger competition for both attached and detached homes. Interest rates remain very favorable, hovering around 6%. Buyers continue to weigh all of their options and wait for their ideal home or a ‘great deal’. Sellers are enjoying less competition and, if priced and marketed correctly, should be able to sell within their timeframes. Attached properties are battling each other for a sale, but keeping their sale prices firm. The Carlsbad market is favorable for both buyers and sellers.
He predicted single-digit appreciation and continued demand for housing. Those predictions were backed up with examples of steady but moderate national economic growth, labor market growth and low inflation accompanied by favorable interest rates and long term demand for homes. However, many have been watching the local real estate market closely waiting for an indication that the Carlsbad market will turn in their favor. However, although the report announced positive changes, (read at www.CAR.org) it may take some time before we see something significant.
In some respects, it is a buyer’s market. Interest rates have remained favorable and continue to encourage a strong buying market in Carlsbad. The fixed mortgage rates have dropped to their lowest point since October 2005, while the Federal Reserve rate hike in December has shown little affect on the rates. The average 30-year fixed-rate mortgage hovers around 6 percent, with the average 15-year fixed mortgage rate at 5.75 percent. Inventory levels have remained high for a good part of 2005, giving buyers a number of housing choices and opportunities to negotiate a fair deal for themselves. Value remains the single most deciding factor, as buyers wade through an array of available housing choices before finally selecting their new home.
Attached Home Statistics
Currently, the attached home market is inundated with properties ‘for-sale’ and sellers are feeling the pinch of competition. For many years, condominium and townhome properties have enjoyed substantial appreciation. In some instances, the investment potential of an attached property has been superior to detached property, yielding the same amount of appreciation for less of an initial investment. One of the greatest tax breaks a homeowner can utilize is that of the 2 year capital gains tax incentive that allows married couples to sell their primary residence and not be taxed on up to $500,000 of their appreciation. With attached properties experiencing substantial gains in the last four years, homeowners can move their equity into a larger home that will allow them the ability to ‘stay-put’ in case the local real estate market softens in the short-term. This may explain why Carlsbad has almost 40% more attached properties on the market than the same time last year. The want for stability and comfort is paramount.
Single Family Home Statistics
The single family home market remains competitive, but has enjoyed less competition than that of the attached properties. During the 3rd quarter of 2005, inventory for resale detached homes were at a record high. Prices held, due primarily to the sellers' reluctance to lower their price in the face of competition. As we entered into the holidays of 2005, the number of homes began to lessen. However, the number of family homes for sale should increase as the year progresses towards the summer months and it will be interesting to see if average sales prices will continue to move upwards as the CAR economic report suggests.
Wrap-up
In short, prices hold steady in the face of larger competition for both attached and detached homes. Interest rates remain very favorable, hovering around 6%. Buyers continue to weigh all of their options and wait for their ideal home or a ‘great deal’. Sellers are enjoying less competition and, if priced and marketed correctly, should be able to sell within their timeframes. Attached properties are battling each other for a sale, but keeping their sale prices firm. The Carlsbad market is favorable for both buyers and sellers.