Prices, bubbles, and timing

My housing trends post from a year ago was so spot-on that I didn’t want to write anything else about the market. It just couldn’t have been as prescient. Still, a year is a long time to spend helping people buy and sell property without writing about it. If you missed out on the 15% market rise. You are probably wondering whether 2014 is going to be another year of rapid appreciation. I am going to stick my neck on the block for my fellow real estate agents to chop at and say, “I hope not.”.

Why would another year of appreciation concern me?

My concern for first time buyers is at the top of the list. Sonoma County is one of the most beautiful spots in the world and the people that live and work here have created a casual ambiance that we all cherish. We need housing that’s affordable to our chefs, our musicians, our farmers and health care providers. Don’t forget the teachers, cops and firefighters, and administrative folks that keep our schools, businesses and government running. There’s a huge population of just regular folks that call Sonoma County home, and the housing market has to serve them all.

Many people, of course, prefer to be renters. It’s flexible and well suited for people who aren’t tied down with families or career choices. Traditionally, renters have been about a third of the housing market, and that’s probably a realistic figure. That leaves around 60-65% of local dwellers as home owners…or wannabe home owners.

My wish is for a healthy housing market with a good balance of buyers and sellers and a gently appreciating market. Notice that I called that a “wish” and not a prediction.  My prediction is that we’re probably going to be closer to last year’s strong appreciation with an advantage on the side of sellers.