Fall Home Maintenance Checklist – Santa Cruz Mountains

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Regardless of whether you rent or own your home, these tips can save you money, keep you warmer, help you breathe cleaner air and even keep you safe.     Even though today it’s a warm late summer day, the first day of fall is right around the corner on September 22nd!       Make good use of the wonderful weather while it’s still light after work, and over the next few weekends as you check things off this list.

brown beside fireplace near brown wicker basket
Photo by on

If you use a chimney cleaning service, call early to schedule this annual maintenance before the rush.    Creosote build-up is dangerous.   Use the sun’s remaining warmth this fall to make sure your wood pile for the winter is dry: burning dry wood reduces unhealthy smoke for everyone.   Check your wood pile covers and tarps for gaps and tears and replace or repair if necessary.


Check your heater thermostat batteries & change the filter.    If you have pets, plan to change filters every 60 days; if not, every 90 days.    If you turned the pilot light off for the summer, you may want to relight and test it before the first cold snap.   If you haven’t had your heater serviced recently, consider calling a professional in before the rush.

Check to see if any outdoor safety light bulbs have burned out.   The days are already getting shorter, and the time change will be on November 4th this year.

Gutter cleaning Free C21 Online shutterstock_215924530-900 092418Make sure debris is swept off the roof.  Clean out gutters and downspouts before the first rain, which is often sometime in October in the SLV.    Meanwhile, a clean roof adds a measure of fire safety.   While some homeowners do this themselves, others prefer to hire the task out – in either event be extra cautious around power lines and risk of falling.

Some overhead fan blades’ direction can be switched twice a year.   This can save on heating or cooling bills.

Insulate exposed water pipes.    While it’s not likely to freeze for several months, once it gets cold you may not be outside as often to notice which pipes could use insulation.

Trim any tree limbs that have grown to overhang the roof, chimney, power lines or walkways.   This helps with fire safety throughout the year.   Keep in mind that limbs will droop a lot from weight once they get heavy with rain.   During the winter this extra weight and winds can cause some limbs to break and fall.

Stock up early on flashlights, candles, water and emergency rations.

FALL driveway view(2) off C21online 092418
Autumn Road

If you have a generator, perform any routine maintenance, change out the gasoline, and fill up a few gas cans.

Sharpen up your chain saw blade so you can pitch in if storms drop a branch in your street.

Form a neighborhood work party to check and clear fall leaves and other debris out of road culverts and drainage ditches so water doesn’t back up, flood or even wash a road out.

Decks will last a lot longer with maintenance, including cleaning out the debris lodged between surface planks, scraping off mosses which can retain water, and treating with a water repellant sealer.

Check the weather stripping around your windows and doors and replace what’s come loose.   This will cut down on drafts and heat loss.    Well placed caulking can help prevent rain leaking in when the storms start blowing sideways, and is a relatively easy do-it-yourself maintenance task.

Living in the Santa Cruz mountains is a wonderful experience that can be especially rewarding when you’ve taken time to prepare.     As my dad is fond of saying, “Winter’s coming!”

Fall Snowball bush

July’s CA statewide median home price was $591,460, down 1.9% from June, up 7.6% from July 2017.

San Lorenzo Valley July median home price $680,000; up 6.25% over July 2017


MC Dwyer (CA DRE#01468388) is affiliated with Century 21 Showcase REALTORs

Whenever you have real estate questions,    just text or call MC at (831) 419-9759, or, 012_Fireplace by Michael Eckermane-mail me at

I’d love to help you buy or sell your home.

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Happy first time home buyers in the Santa Cruz Mountains

It all began when I answered an incoming call, even though I didn’t recognize the phone number.     A genteel and intelligent young man began asking me some great questions about purchasing a home in the Santa Cruz mountains.    We agreed to meet soon after…

I was competing with the number one real estate team for these first time buyers’ business.    After many more thoughtful questions and answers, they chose to work with me.     These first time buyers had my complete attention: their trust, happiness, referrals, and eventually their repeat business means everything to me.     The way I look at it, my clients are number one, not me!

And so, the search was on for their perfect home.     Armed with their wants and needs, I set out to tour possible properties.  We toured the leading possibilities together and I refined my understanding of their ideals.

On brokers’ tour one week, I came across two great candidates.   I video taped a candid walk-through.    I went to this extra effort because they are very busy people who are relocating from another area. These videos helped to convey the property setting, which was the main objective: they wanted a property that felt like a retreat from their hectic  work and lifestyle.

The next phase was the offering process.    This was more challenging, because there were about half a dozen offers.     We talked about other properties, their strategy, and the fit of the property for them.    They made informed decisions and won the bidding!

I’ll zoom past the many, many details of the escrow, which was only three weeks long: the sellers’ choice.    Closing day was yesterday, and I’m delighted to say – they’re happy campers.


San Lorenzo Valley real estate prices August 2017

San Lorenzo Valley home prices, Scotts Valley home prices and Santa Cruz home price changes through August 2017:


PRICES   Feeling like the cooler weather and yellow leaves dancing in the light breezes of fall, average single family home prices across Santa Cruz County seem like they might level off a bit this fall.      The county’s affordable price range, $600,000 and under, is still sizzling like a summer bar-b-que, with multiple buyers pursuing just a handful of homes.     The San Lorenzo Valley has some of the most affordable homes in Santa Cruz County: home prices run about 67% of the county average.

Here’s an example of an affordable San Lorenzo Valley home I sold.   This two bedroom home received three offers, selling for $429,000.     Within the next week I expect to have a larger two bedroom home listed – please call for details.114_Roble_ext

CURIOUS WHAT YOUR HOME IS WORTH?   Visit  for a quick and easy estimate!    If you’re thinking of selling, I’ll help you evaluate cost effective ways to make your home appeal to the most buyers.    My customized marketing plan is exceptional: contact me to discover why I have so many repeat clients.

LOOKING FOR YOUR DREAM HOME?     Click here!   I’ll help you secure financing, negotiate with the seller, review disclosures and potential red flags, attend inspections with you, and…hand you the keys!

SILICON VALLEY The housing shortage in the Silicon Valley is a systemic problem.    In Santa Clara County, the average price of a single family home in August was $1.4 million, holding steadily over the past year.    Santa Cruz County is a great option when high tech workers look for reasonable housing prices within commute range.    One of my specialties is helping people relocate here!

SANTA CRUZ COUNTY’S APPEAL People from the Silicon Valley are understandably enchanted by Santa Cruz, with our beaches, many parks, smaller cities and towns.     The Santa Cruz lifestyle is less formal with a slower overall pace.   There’s more room to spread out, and consequently lower stress, crime rates and smog.   People tell me they enjoy driving through the mountains to work, rather than sitting in traffic and spending more money to live “over the hill.”

INVENTORY    If you’re considering selling your home – early fall conditions are still ripe!     The market still doesn’t have enough homes for sale in the under $1 million price range.   San Lorenzo Valley has about 70 homes for sale – about 20 more single family homes than at this time last year – but this year, 10 are priced over $1 million, twice as many as last year.

Scotts Valley has about 40 homes for sale, stable, nearly ¾ of which are priced over $1 Million.     Santa Cruz – a far larger city –  has just 40 homes for sale, again, ¾ of which are over $1Million.

DAYS ON THE MARKET Overall, Santa Cruz County homes are on the market about 45-50 days on average before going into escrow with a buyer.   This is about 2 weeks longer than last year.  I think this is because recently, some sellers have been tempted to price their homes too high, but then have to adjust downward after waiting but getting no offers.    Competitively priced and affordable homes are still selling quickly with multiple offers.   Right now, Santa Cruz County has 378 homes for sale (versus 396 around this time last year).

REAL ESTATE MARKETS ARE LOCAL!   The advice of a knowledgeable local REALTOR® who can show you the trends in your neighborhood and your specific kind of property and price range is invaluable.   Different communities and different price ranges don’t move in synch.  The price a buyer should offer, or the price a seller should list their property for, takes not only in-depth research but also field knowledge.   Buyers or sellers should choose their REALTOR® carefully: consider if an agent will have enough time to dedicate to you, in addition to someone who knows the area well and perhaps even lives nearby.

INTEREST RATES    The Federal Reserve met this week;  their meeting minutes say the economy is on track for modest growth with minimal inflation (under 2%).   ¾ of voting officials appeared to be in favor of raising interest rates in December.    30 year home mortgage rates rose ever so slightly to about 4%, depending on personal factors.

Sources: (Single Family Residences), Reuters, Inman News,,, Mercury News.     Month to month home sales prices fluctuate widely in small communities and cities, especially where property values can range between multi million dollar properties and fixer upper sales.  Because of this,  percentage and average price changes aren’t statistically meaningful for a static 30 day period.      *All stats as of 9/15/17, single family residences only.



2015 San Lorenzo Valley Real Estate Prices

Here are the average San Lorenzo Valley home prices & annual price change (rounded) for each community:


The average price for a 3 bedroom, 2 bath home in the San Lorenzo Valley (SLV) during 2015 was about $625,000, up from about $537,000 during 2014, $492,000 in 2013, and $389,000 in 2012.   Back in 2006, the average was $662,500, compared to $616,000 for 2007.   It’s safe to say the region is close to full recovery from the historic “Great Recession.”

In 2015, the most expensive single family residential (SFR) home sale in the SLV was in Lompico Zayante, the second million dollar plus sale ever in that zone of the multiple listing service (MLS).   The house itself was a little bit rough around the edges, but at 3,000 square feet it had the “bones” to be a great home with some TLC.   What really caused the property to fetch $1.6 million was the private, sunny, 90 acre setting with ponds, fruit trees and a horse barn.

The next highest price sale was in Felton, also at $1.6 million, for 5,000 square feet of estate quality living area encompassing a main home and guest house, situated on about 7.5 acres.

In all, 7 properties in the SLV sold for $1 million or more in 2015.   Two were in Boulder Creek, two in Brookdale and one in Ben Lomond according to MLS zones.   All were on acreage: the smallest lot size was an all-usable 1.7 acre parcel bordering the San Lorenzo River.

On the lower end, the least expensive SFR sold for $80,000, also in the Lompico Zayante area.   This 1 bedroom 1 bath was on a 6,500 square foot lot.     Next up was a $101,000 sale in Boulder Creek – a 1 bedroom 1 bath on a 16k lot between Highway 9 and the San Lorenzo River, a fixer upper to be sure.   All in all, just 5 houses sold on the MLS for less than $200,000 in the SLV during 2015.

Where is the real estate market headed in 2016?   Drawing upon all the articles I read, it seems the nation may experience modest price gains this year, perhaps in the 3-6% range.   Although the majority of the nation’s regions are back to full recovery, still, about a third of regions are below the peaks of 2006-7.

Just 22 homes are available for sale in the San Lorenzo Valley: inventory is excruciatingly low.   With just 1 month of housing inventory, we are in a strong sellers’ market (6 months is considered to be a balanced market, more than 6 month’s supply creates a buyers’ market).


Favorably priced homes are selling quickly, some with multiple offers, and within a few percent above or below asking price.   Overpriced listings continue to linger on the market, making it appear that Days on Market is extending.


Santa Cruz County is influenced by real estate conditions in the Silicon Valley.   I’ll bet that recent declines in gas prices will make our more affordable housing even more appealing to commuters, particularly if the average home prices in the Silicon Valley continue to increase like they did in 2015.   The lifestyle here holds appeal for so many people who would rather live closer to beaches and mountains, parks and recreation, and amidst a lower population density which conveys benefits like less stress, crime and smog.

In Santa Clara County, single family homes started the year 2015 at a median sales price of about $850,000…rising to about $945,000 by December 2015.   In comparison, the Santa Cruz County median December 2015 price of about $680,000 (up from about $640k in January), is more affordable, appealing to many home buyers.

Perhaps the Federal Reserve will pause and let the market absorb their first increase in interest rates in a decade…right now the market is expecting one more increase this year, although some central bankers are still talking about several increases.     December’s 0.25% increase in the Fed Funds rate has not affected the 30 year mortgage rate significantly, most likely because the increase was already factored in by the market.   Most buyers are still able to get rates in the low 4% range, if not a tad lower.

The stock market got off to a rocky start the first week of 2016, with negative global concerns like China’s faltering economy, falling oil prices and somewhat rich price earnings ratios being blamed.    While I’ve found most prospective home buyers don’t rely on the stock market for their down payment, (they tend to keep down payment money in cash at the bank), still, if the market were to enter bear territory, consumer sentiment could be affected.

I’ll close with comments about the new consumer disclosure laws that went into effect in October of 2015.     “TRID” (TILA RESPA Integrated Disclosure, also known among agents as “The Reason I Drink”) has delayed closing schedules for a few months now, as lenders and title companies get used to the new requirements and adapt their internal software systems.     Many of the escrows I’ve closed were affected by delays ranging from a few days to as much as a week.

Be sure to visit my website  for more real estate resources!

Looking for your Dream home?     I’ll help you find financing, negotiate with the seller, inspect what concerns you, and hand you the keys!


*2 homes sold in zone 35/Brookdale during 2015 for over $1 million, skewing the appreciation rate to the high side.   When the total number of transactions is low, like it is for this small community, these kinds of swings can happen.

Sources: (Single Family Residences zones 34-38), Reuters, Inman News,, Zillow,, Mercury News


San Lorenzo Valley Real Estate market update – 1st Quarter 2014

San Lorenzo Valley Real Estate prices 2014

The average price of a single family home was $438,476 during the first quarter of 2014, up about 3.8% over the average of $422,468 in the 4th quarter of 2013.   SLV home prices are  about 26.5% higher than the $346,460 average during the first quarter of last year (Q1-2013).

How does this compare historically?   The Q1-2007 average price was $589,165!      Q1-2013 turned out to be a “second bottom,” if you will, after Q1- 2009 when prices dropped to an average of $380,763.      Keep in mind, each and every home value does not rise and fall to this degree!    What this means is that more expensive homes are selling more often now.

52 homes sold in the San Lorenzo Valley during the first quarter.   Average days on the market is pretty stable – 73 days this quarter– however– over half of homes sold within 40 days – and a quarter were in escrow within 2 weeks*.

The percentage of short & bank owned sales declined to just 21% (compared to 28% last year), reflecting the national trend of rising home equity.

The least and most expensive home sales were both in Boulder Creek: $150,000 for a fixer on about ½ acre, and $1,000,000 for a stunning estate – a 9 year old custom 4,800 square foot home, situated on 3+ acres.

In case you missed it, here is an overview of 2013 SLV home prices, by community:

Town Price Change Average Price Days on Market Sales Price vs. List Price
Boulder Creek +28% $398,003 71 99.5%
Brookdale +59% $394,160 66 101.2%
Ben Lomond +13.3% $447,354 36 100%
Felton 20.2% $430,719 42 98%

San Lorenzo Valley home prices – 2011 through 2014

SLV Real Estate
San Lorenzo Valley Home Prices


If you are thinking of selling your house this year, check with me – your home may be worth more than you think!     Multiple offers are really common! –Especially for homes priced under $500,000.

In this strong market, buyers really need a dedicated agent to help them through the process.   There still aren’t enough homes on the market for everyone, but I have strategies to help buyers so home buying goes as smoothly as possible.


Concerned about how to buy when you have a home to sell?   I’ve several strategies I’d be happy to walk you through.   There are ways to make the timing of your transaction less stressful.   E-mail or Call me soon so we can talk about your particular situation and create a plan you’re comfortable with.

SLV Housing Inventory
SLV Housing Inventory


Although more people are putting their home up for sale, we have barely 4 months of housing inventory right now: under 6 months is considered to be a sellers’ market.


What are people saying about buying / selling with MC?   Click here to find out! Call MC Dwyer, Century 21 Showcase REALTORs, (831) 419-9759.

*Source: single family homes sold through, as of April 25, 2014, zones 34-37


POSTED BY M.C. Dwyer, MBA, REALTOR    call/text (831) 419-9759

Century 21 Showcase REALTORS copyright 2014


SLV Home Prices – Second Quarter 2013

The San Lorenzo Valley turned in a smoking hot second quarter of 2013 – 78 homes sold at an average price of $420,858, up 18% over the same period last year  (66 homes sold at an average price of $355,435 in 2012).

The San Lorenzo Valley residential real estate market was still red hot this July, when 32 homes sold at an average price of $439,818.    Similarly, 36 homes sold in August at an average sales price of $426,613.   In order not to skew the average, I removed the most expensive property from the calculation.    Because the 87 acre Johnson ranch in Boulder Creek fetched $2.25 Million, if it had been included in my calculations, the average price would have been $477,263.

This year, for the first time since 2008, a Boulder Creek home sold for over one million dollars.    According to the MLS, only a dozen other homes have sold in this price range, all between 2005 and 2008.

This 4800 square foot 5 bedroom home featured a gourmet kitchen, pool, and about 4 private, usable acres with an adjacent parcel sold separately.

Average prices are the highest they’ve been since August of 2008.  SLV Real Estate prices have recovered well from the low point in February 2009 and September 2011, when the SLV average home prices briefly touched $270- $280k.

The pace in the first quarter of 2013 was 63 sales, with an average price of $348,842 between January and March.

This quarter, 12% of homes went pending sale within 7 days, compared to 22% last quarter, giving buyers just a little more breathing room.   Homes went into escrow on average within 43 days of being listed.   The average days on market was 69 days during the first quarter.

The San Lorenzo Valley simply doesn’t have enough sellers willing to sell their homes, compared to all the buyers who want to buy.

Graph of SLV Homes for sale
Graph of SLV Homes for sale

The chart on the right shows we’ve just 4 months of inventory – a seller’s market.    (6 months is considered a balanced market.)   This competition puts upward pressure on home prices.

Multiple offers are common.   It takes steel nerves to persist as a buyer right now.   Many buyers want to lock in affordability: even though interest rates have gone up, they are still very low by historical standards.    My sense is this market flurry is a result of buyers watching their purchasing power diminish as both interest rates and home prices rates rise.

The Federal Reserve has been talking for a couple of months about curtailing their bond repurchase program, which they’ve used to keep interest rates low until unemployment and other economic indicators stabilizes at an acceptable rate.   This week their remarks show they’re poised to reduce their economic stimulus package as early as September.

Distressed sales are declining as a percentage of overall sales to just 25% of the total, although they account for about 50% of the sales of homes priced under $400,000, and about 75% of homes priced under $300,000.

Only 17 homes in the San Lorenzo Valley sold for $250,000 or less: all but a couple of 1 bedroom homes were contractor specials requiring cash buyers.

Although a couple of lesser quality 3 bedroom 2 bath homes sold for under $300,000, the average price for a 3 bedroom, 2 bath home is now about $530,000.

If you have been thinking about selling your house, there’s still pent up demand.  Even if you have a distressed property to sell, don’t worry  – about 40% of my transactions this year were short sales.     To find out what your San Lorenzo Valley home is worth now, click here or call MC Dwyer, Century 21 Showcase REALTOR at (831) 419-9759.

Source: statistics as of 8/6/13 for for single family homes in zones 34-37 between 4/1 and 7/31/2013


Loch Lomond is Open in the Santa Cruz Mountains

Today, March 1st, marks opening day at Loch Lomond  

Lovely Loch Lomond is a pristine mountain lake located in the Lompico area of Felton – about half an hour from Santa Cruz.   (see directions below)

Image Anglers, hikers, and picnickers can enjoy this quiet reservoir –(no motor toys allowed) – plus some great weather this weekend!    If you’re a boater, know that this lake is part of the water supply system for Santa Cruz, so no outside boats are allowed to be brought in.   This is because the pipelines need to be kept clear of invasive species.   But you can rent a boat there, or contact the park rangers about leaving your own boat there.    Recreation Area staff can be contacted by calling 831-335-7424 for more information. A substantial boat rental fleet is available on a first-come, first-served basis.

From Santa Cruz, San Lorenzo Valley or Scotts Valley, take Graham Hill Road to Zayante Road.    Follow Zayante for a few miles, then take a left on Lompico Road.   After a few miles take a left on West and go up to the top of the mountain.    There are signs along the way.

Up at the top of West, I’m about to list a wonderful cabin with end-of-the-road privacy and a delightful separate studio/out building…within walking distance to the Lake!   Contact MC Dwyer for details…(831) 419-9759

Click here if you’d like help finding or selling your dream home near Santa Cruz

Call/text/e-mail me to post your upcoming events anywhere in the Santa CruzMountains


San Lorenzo Valley Real Estate Prices – 2012 in review

San Lorenzo Valley Home Prices and Sales – 2012

The real estate market in the San Lorenzo Valley turned in a solid performance for 2012, with an average home sales price of $338,238, up 5% on average for the year.

SLV Home Prices

The key factor affecting home sales right now is a lack of inventory – the number of homes for sale is at an eight year low!    Yet, there are many buyers, including cash investors and first time buyers who want to lock in great interest rates.     The imbalance of supply and demand leads to competition, and that supports increasing prices.

A new home listing, priced properly and marketed well by your agent, is likely to get multiple offers, even over asking price.    There just aren’t enough homes on the market to match buyer demand.  Another measure of demand: Days on the market (before the house goes into escrow) is about 2-3 months, putting us solidly within what’s known as a sellers’ market.

SLV housing inventory 2012 by month

If you are contemplating putting your house on the market, there’s pent up demand right now!    Look at the typical upward swing in inventory during the summer months in the chart– is there really a reason to wait to list your property?    To find out what your San Lorenzo Valley home is worth now, click here

The Santa Cruz Mountains and San Lorenzo Valley are influenced by the hectic Silicon Valley and greater Bay Area markets which experienced rapid appreciation in the range of 20% during 2012.

Felton fields and clouds, photographed by John Urwin
Felton fields and clouds, photographed by John Urwin

With gas prices a bit lower lately, more working people are willing to make the 30-45 minute commute from the San Lorenzo Valley.   They feel it’s a great trade-off because they can come home to more affordable homes and a more relaxed lifestyle, with less crowding and more open spaces.  For the average price of $340k, buyers got a 3 bedroom, 1200 square foot home on lots averaging 1/4 acre or more!

Santa Cruz Mountains: Location, Location, Location!

Earlier this week I took the day off to enjoy a walk along Pleasure Point, dropping

Pleasure Point Egret
Pleasure Point Egret

occasionally down to the beach to look at the tide pools, then back up to street level where people were skateboarding and walking their dogs, enjoying the sunshine.   During dinner on the wharf in Santa Cruz, we watched the pelicans diving for fish, against the amazing backdrop of sunset and ocean.   Returning back home to the San Lorenzo Valley in the evening took less than half an hour, and I again felt so blessed to be living in such a diverse and gorgeous place.

Mortgage rates for a 30 year fixed loan continue to average well below 4%, allowing people to secure their future housing costs.   First time buyers are a big portion of the market, because renting costs just about the same as owning.   Investor buyers are a big factor as well, often defeating first time buyers in competition, because they are putting down a lot of cash – often buying homes with no loan at all.   Understanding the challenges involved in getting a loan, many sellers will choose a cash buyer if they have the option.   Buyers making a down payment of 3.5% or less may find themselves loosing in competition to buyers with a larger down payment, if the seller can choose amongst multiple offers.

2012 –year in review

299 homes sold in the San Lorenzo Valley – from Boulder Creek to the town of Felton (according to the Multiple Listing Service, areas 34-37).    The volume of sales is up about 16% this year compared to last, and the average sales price is up about 5% to $338,238.     (vs. $321,555 average price on 256 sales in 2011.)

In 2012, 46 homes sold for over $500,000, almost double the number in 2011, when just 26 homes had sold for over $500,000.

At the high end of the spectrum, two homes this year sold for $875,000 – one in a good Boulder Creek neighborhood and one in Felton – both were on acreage.

At the bottom end of the spectrum, 8 homes sold this year for less than $100,000 – all had serious deficiencies and would not qualify for a loan.

Distressed sales were still a big factor in the 2012 housing market in the Santa Cruz Mountains, particularly dominating the lower price range.  75 short sales and 76 foreclosures (REOs) caused about  50% of sales to be distressed properties.   It’s possible that there will be more short sales and fewer foreclosure sales in 2013.   This is in part because lenders have learned that unoccupied homes fall apart – loosing value quickly-  so they are seeing short sales as more advantageous.   For buyers, short sales are taking less time to get approved, so the risk is less than before.


CNN Money reports – Buying a Home may Never get any Cheaper

Buying a home won’t get much cheaper

By Les Christie @CNNMoney May 3, 2012: 11:48 AM EST

Several housing experts are predicting that this year will be the last chance for homebuyers to cash in on the weak housing market.

NEW YORK (CNNMoney) — Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.

With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable — but it won’t stay this way for much longer.

Stuart Hoffman, chief economist for PNC Financial Services (PNC,Fortune 500), said he expects home prices to flatten out by the third quarter and start climbing by next year.

A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.

Some economists, like Trulia’s Jed Kolko, expect home prices to pick up even more quickly. Trulia’s data shows that the national average for asking prices already increased 1.4% in the first quarter of 2012, compared with the last three months of 2011.

“This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer,” he said.

Prospective homebuyers who’ve been sitting on the fence shouldn’t worry if they aren’t quite ready to make the leap. Analysts are predicting that the initial price gains will be modest, at least, in most markets.

Hoffman, for example, is forecasting a 2% increase in 2013 compared with 2012. Meanwhile David Stiff, chief economist for Fiserv, predicts that prices will turn in the last quarter of 2012 and will rise 4.2% for the 12 months through September 2013.

Foreclosures start to fade. One major factor that will drive the trend is the cooling of the foreclosure crisis. Stan Humphries, chief economist for Zillow, said that the percentage of mortgage loans 90 days or more late, a good predictor of future foreclosures, is “falling fast.”

That percentage dropped 15% year-over-year to 3.1% through the end of 2011, according to the Mortgage Bankers Association. And the decline is accelerating: More than 70% of the decline came in the last three months of the year.

Before things slow down, however, buyers should brace themselves for a temporary spike in the number of foreclosures as banks start expediting the processing of hundreds of thousands foreclosures that were stuck in the system following the robo-signing scandal. That backlog should move more quickly now that new guidelines for processing foreclosures have been outlined in the $26 billion foreclosure settlement.

Many of the bank-owned properties currently coming out of the foreclosure pipeline are being snapped up by investors who are fixing them up and renting them out — often to those who were displaced by the foreclosure of their own home. That has helped to lift prices on foreclosed properties, according to Alex Villacorte, the director of analytics for Clear Capital, which specializes in housing market valuations.

“That could have a significant impact on the market overall in terms of providing a rising floor to home values,” he said.

In some markets hit hard by foreclosures, the turnaround in prices is already underway. Phoenix recorded an 8.4% jump in home prices during the three months ended April 30, compared with the three months ended January 31, according to Clear Capital.

“It’s crazy,” said Tanya Marchiol, founder of Team Investments, a Phoenix real estate investing firm. “Stuff I was selling six months ago for $60,000 to $80,000 is now $90,000 to $110,000.”

Miami saw a 4.6% increase quarter-over-quarter through April, andTampa, Fla., was up 4.4%, according to Clear Capital.

Goodbye 3.8% mortgage. In addition to home prices, mortgages could also move higher.

Mortgage rates have been at or near historic lows for much of the past six months. The average interest rate for a 30-year, fixed-rate mortgage has not topped 4.5% since July 2011 and this week, it hit 3.84%, a new low.

But rates aren’t expected to remain at these record-low levels much longer. As the economy continues to recover, rates will move higher, said Doug Lebda, CEO of LendingTree, the online lending site. Although, he said, they will “stay very reasonable.”

The Mortgage Bankers Association is forecasting that the 30-year fixed will hit 4.5% by the end of the year.

Greater demand for loans will help fuel the increase, according to Lebda.

Even though mortgage rates have been cheap, borrowing for home purchases has been sluggish. The Mortgage Bankers Association estimates that homebuyers will take out mortgage loans totaling about $415 billion this year, an increase of less than 3% compared with 2011. Next year, however, it forecasts that amount will almost double to $706 billion.

As housing markets stabilize and prices stop falling, homebuyers will be even more confident about buying, said Humphries.

“People can now see the light at the end of the tunnel,” he said. “And that can be enough to get them off the fence.” To top of page