Rocklin Real Estate: What Will 2014 Bring??
Market Slowing Raises Concerns
I was doing a little research for a client this week and found that from July to the end of November 2013, the West Rocklin real estate market actually lost value to the tune of 10.18% while surrounding cities lost significantly less in the average sales price. I’ve read over and over again about how 2014 is shaping up to be a great year for real estate, I’m not so sure where it concerns the West Rocklin market. Are we set up for the perfect storm in Rocklin? Here’s what I’m seeing.
The Economy
Currently, the economy is gaining steam. The Fed is considering easing the bond purchasing that has kept the real estate market afloat for quite sometime. When the Fed starts to taper it’s bond purchasing, mortgage interest rates will continue to rise. When interest rates go up, it becomes more expensive to buy a home and the real estate market begins to slow. We’ve have already seen a significant slowdown in activity and a corresponding increase in the number of homes available for sale.
Available Homes for Sale
Since June, there has been a 189% increase in the total number of homes for sale in West Rocklin, 95765. June through October is still the 
selling season yet every month since June has seen an increase in the number of homes for sale. This can be blamed on several factors:
- Affordability – prices went up too quickly scaring some buyers out of the market.
- Interest rates increasing (weak reason but none the less it’s possible)
- Investors have left the building! Most homes for sale now don’t “pencil” for investors.
- Buyer apathy. The competition just got too stiff for homes with multiple offers on every listing.
There could be more but these are just the obvious reasons. What happens when the competition gets really stiff for sellers??
New Construction – Guess What Happened This Year??
In West Rocklin, at last count, there are 5 new home communities going up. Construction starts are going through the roof. Dr Horton/Parkside is going in at the corner of Blue Oaks and Sonora Pass Road. Models are almost done and they’ve got framing done on another 4 or 5 homes. JMC is building out in the Whitney Ranch area. Most of these communities will be open, if they aren’t already, by spring. That will add to the inventory numbers in a market that is currently not very hot. (Click here for more new construction news) An oversupply of homes means one thing..declining values and a buyers market. That’s not good for sellers. Not by any stretch. Given the option, which would you buy first…an existing home or a new home with the latest technology for about the same money?? It could be very challenging for existing homeowners to sell their homes.
Summary
We have the following that could severely effect the Rocklin real estate market in 2014. It looks like this:
- Interest rates continuing to rise, thank you Mr. Fed! (or is it Ms. Fed now??)
- The number of homes for sale has been rising since June on it’s own without new construction inventories..yet.
- We have new construction going up all over West Rocklin further adding to the inventory of homes for sale in 2014.
- The average sales price from July to November has already slipped over 10%.
- The economy would have to skyrocket to overcome the above challenges. It could happen but more than likely the economy will continue to improve at a moderate pace.
- Next??
“Next” is anyone’s guess but 2014 could be a little challenging for the Rocklin real estate market. What do you think? Too pessimistic or too optimistic??
Buying or selling a home in Rocklin? If so, I’d like to help you. Please call or text me directly at 916-532-7653 or click here, for my contact page.
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