Prediction for Average Appreciation in 2015

So as I sit here reviewing all the material on real estate I believe the talking heads have it wrong again and I thought I would put pen to paper so I can hold myself accountable. 

Near as I can tell most real estate professionals on TV are calling for real estate appreciation of under 5% next year.  I have actually read some articles calling for sub 3% which I think is just funny. So why do I think this?

First as someone who has been doing this a while 13+ years I have seen a few cycles in my time and I feel we are in the early innings of another growth phase like 2001-2005.  Hopefully without the 2006 and 2007 fake appreciation caused by all the finance hocus-pocus of CDO's from Wall Street.

Second as a long term buy and hold investor who was very active during the crash and had to resort to using hard money and private investors at rates in the 9%-10% range because no bank would lend to me I can tell you banks are starting to loosen the purse strings slowly.

Now I haven't been activly looking to refi as the loans are so small and I have a full time job and I don't feel the need to explain over and over again yes we really do own all those units.  Also who really wants to fill out a mortgage application for a single refi that may save $40 a month when the transaction costs make a payback in the 2-3 year range depending on fee's.  That all said while it may not help me I can tell you banks are once again lending and even open to refinancing rental properties again as long as you don't take cash out and have good to great credit.

I bring all of this up as I think lending to investors will get a lot easier next year and in 2016 watch out.  It was once said we live in a world of 10 year cycles with 7 year memories and by 2015 it will have been 7 years since the start of our real estate depression which means banks should have forgotten most of their mistakes and start lending to credit worthy investors regardless of portfolio size once again.  This will create a more liquid system with more cash chasing less deals and as we know more demand with fixed supply equals higher prices.

I believe 2015 will see a 7% national appreciation rate while California will see a 10% average with Fresno (my chosen market) seeing a 13% appreciation rate.

Again I wanted to once again put pen to paper and hold myself accountable as I am calling these numbers in the middle of 2014.  I guess we will see what happens when 2015 closes

Good Investing

Z