Yet another year has come to an end.  We hope 2014 was a good and memorable year for you.  As we enter 2015, we wish you the full optimism, energy, and momentum that comes with the arrival of a brand new year.  We want to encourage you to create a New Year’s Resolution in writing.  It’s been proven that when a goal is written down, you have a much higher chance of achieving it.   We hope you will achieve all your goals and realize all your dreams in 2015!

Here are some suggestions for consideration in your real-estate related resolutions:

  1. Upsizing: Current home getting too tight? Have a growing family? Average move-uppers purchase a home 1.5 times larger than their current home.  For example:  They move  from a 2,000 to a 3,000 Sq Ft home.
  2. Downsizing: Have rooms or a pool that are never used?  Maintenance of a large home getting tiresome? Most downsize to simplify or lower the cost of living.  But many also downsize to increase quality of life.  They purchase smaller homes in more desirable areas or into a more upgraded home.
  3. Home Ownership: It is still possible to purchase a home with a monthly payment lower than the cost to rent it.  Home ownership is still the quintessential American dream.  Are you ready to become a home owner in 2015?
  4. Selling: Changing priorities and plans have you thinking about selling your home?  Is it time to re-evaluate your investment properties?  It’s important to have a professional consultation in this changing market.
  5. Real Estate Investing: It has been said that majority of the wealth in the United States has been made in real estate.  There are so many facets to real estate investing.  We are happy to share with you what we know.
  6. Bonus: College Savings Plan: Is there a new born or a young child in your own or extended family?  Consider buying a rental home for the child.  Let’s say you can do it with 25% down and a 15 year mortgage.  When the child is 15 years old, the property will be paid off.  It can be sold for college tuition or any other financial need.  Or, the future monthly rental income can cover the child’s expenses.

These are just some ideas.  We have more!  Happy New Year!

New Year Cover 2015 cropped

We want to wish you a happy, healthy, and prosperous New Year.  We hope 2015 will be the year that you achieve significant landmarks in your life.  May you reap the full benefit of the optimism and momentum that comes with the beginning of a new year to fuel your drive towards all your chosen goals.

The Yao Team is preparing for a great year ahead in the real estate market.  We expect 2015 to be a year marked by a return to normalcy and balance.  We’ve been watching the various market forces interact with one another throughout 2014.  The housing supply and demand should balance each other out sometime in 2015 (see the Three-year History-Inventory chart below).

3 year history inventory

In a stable and balanced market without high appreciation potential, we expect investors will be a small segment of the market.  Although, foreign buyers who worry about currency fluctuation or restrictions in their own countries still may want to invest in the more stable U.S. to preserve capital and they may still play a significant part in our market here.  Otherwise, the majority of the market activity will be homeowner purchases. Generation Y buyers may start to overtake Generation X buyers as the largest group of homebuyers in 2015.  Baby Boomers may start to downsize this year.  We are already seeing a lot of first time homebuyers as well as lateral movers (selling a home and moving to another larger/smaller home).

Generally speaking, both buyers and sellers will be evenly leveraged.   Sellers will be competing with others sellers on the price, quality, and desirability of their homes for sale.  Buyers may not have more choices of homes per se (the inventory level may have reached a peak), but consistent influx of new listings gives the sense that “another home will come on the market soon”.

Speaking of homes coming on the market, now that we are in January, there is another interesting phenomenon on new listings I dubbed the “January Effect”.  Take a look at the chart below.  You can see there is a spike of new listings hitting the market in January from the low in December, year after year.  We will be seeing this again this coming month.

3 year history new listings

Okay, I will stop here.  As always, contact us if you have any real estate related questions.  Each real estate situation is unique and we enjoy providing consultation with customized analysis and personalized plan.  We look forward to chatting with you in 2015!

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