The US real estate market was the comeback kid in 2013. Low inventory, historically low interest rates, increasing home values, and consumer confidence spurred the housing recovery in 2013.
In 2014, the continued recovery is expected to be slow and steady. Robert Denk, the assistant VP for forecasting and analysis of the National Association of Home Builders (NAHB), states that we are “past the point where we are digging out of holes and repairing the carnage of the housing markets. It’s no longer about the boom and the bust. Now it’s about the underlying (state and regional) economies and how that is supporting the housing recovery.”
So what’s in store for 2014?
Here are 10 real estate market trends to watch for in 2014!
*Keep in mind that local market trends may vary from the list below. Don’t forget to consult with your local REALTOR® for the latest market news and information.*
1) Home Prices Increase: Most markets are already seeing home prices normalize close to pre-recession prices. Moderate home price increases are expected in 2014 with increases averaging 3-5%.
2) Mortgage Rates Increase: NAR is forecasting 30-year fixed mortgage rates to hit 5.4% by the end of 2014. While rates are on the rise, homebuyers are more likely to secure a mortgage next year.
3) The “Renter Nation” Persists: The “renter nation” will continue its reign in 2014. Millennials will still struggle to become homeowners in 2014. Burdened with substantial student loan debts, this generation will continue to represent a large portion of the multifamily and single-family rental markets.
4) Millennial Move: Austin, Seattle, Portland, and the Twin Cities in Minneapolis are seeing all real estate sectors influenced by this generation.
5) Inventory Returns: More homes will be entering the market in 2014. Projected declines in negative equity rates and increasing home prices are freeing more homeowners to sell.
6) Distressed Property Sales Decline: NAR expects distressed property sales will fall to about 8% of the housing market by the end of 2014.
7) Sluggish Job Growth Continues: Cities with low unemployment rates will experience stronger housing recoveries than those areas still struggling with slow job growth.
8) “Smile Investing” Returns: Investors will begin in the Northeast, move south to Florida, Texas, and Arizona, then move back up to the Northwest. Expect more housing activity in these areas and less in the Midwest.
9) New Condo Development Put Off: The condo market hasn’t seen the same recovery as the single-family market. Investors are developing rental apartment buildings with the option to convert to condos depending on market conditions.
10) The Seller’s Market Rules: Sellers are in a prime position early 2014 before mortgage rates and home prices rise to their projected amounts by the end of the year.
Do you agree with these trends?
What do you expect to see in your local market?
For more real estate trends for 2014 click on the links below:
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