2013 may go down as one of the hottest years on record - and I'm not talking about climate change. Of course, I'm talking about the real estate market. Even if you haven't been in the game this year, I'm sure you've heard it in the news. Just last night, ABC 7 News ran a story predicting another housing bubble (*gasp* The B-word!).
Another news story out yesterday from Bloomberg Business has a less sensational outlook on the housing market, predicting continued double-digit price gains through the remainder of 2013, with more modest single-digit gains in 2014.
From what I'm observing here in Silicon Valley, I tend to agree with the Bloomberg story that the second half of 2013 will likely be as hot as the first half, even during these normally "cool" summer months. And I also agree with the ABC 7 story, in that the price increases of the past 18 months are unsustainable long-term. But as the Bloomberg story points out, rising interest rates will serve to temper buyer enthusiasm. And I believe that sellers who have been waiting for the peak will rush their homes to market, which will *finally* bring inventory levels up and reduce competition.
And as for the B-word? The only thing that will be bursting in 2014 is the media's housing market hype bubble. This normalizing of supply and demand will simply bring us back to sustainable home value increases. You read it here first.