There?s been grimness at the thought of the real estate market these past several years, but all that is changing now. The recovery that?s been making headway in 2013 will continue into 2014, and the Urban Land Institute actually wrote on its website, ?The year 2014 may well be the year the real estate market ?recovers from the recovery,?? with burgeoning commercial real estate demand. Real estate trends for 2014 are actually looking, in large part, quite encouraging. Here?s an overview of some expected trends:
It?s a Seller’s Market
Home prices are now poised to please sellers more than buyers. Both parties know this, and it?s predicted that potential property owners will be quick to buy before interest rates and home prices rise.
At the same time, it?s also been argued that home prices, rather than being exorbitantly high, are actually reaching pre-recession levels, and that their rise is a symptom of a price correction. Should this be true, it may signal a normalization of the housing market that may see more moderate price increases of about three to five percent.
Currently quite a few markets are seeing an inventory shortage (hence the higher prices). However, the resultant higher prices/seller?s market may very well encourage more people to put their properties on the market, thus freeing up inventory. Consumer confidence also seems to be on the rise, and mortgage restrictions show signs of easing up, so hopefully there will be a fair bit of inventory turnover in 2014.
The Return of ?Smile Investing?
The ?smile?, or the Northeast, Southern cities, then Northwest appears to be a new hot spot for investors in 2014, and these regions will lead the recovery.
Additionally, we may be able to look forward to the more unexpected cities in these regions (i.e. not New York and San Fran) heading the real estate market in the coming year.
Millennials May Have More of an Effect on the Market Than You?d Think
This generation is predicted to have a pretty strong effect on the recovery, as many 20-somethings look to development opportunities.
Less Distressed Properties
The National Association of Realtors expects that distressed sales (so foreclosures and short sales) will fall to about 8% of the housing market by the end of next year, which contradicts fears earlier in 2013 of a looming boom of shadow foreclosures. This ease in distressed sales and the presence of distressed properties is indicative of a healthier housing market.
Things seem to be looking up in the real estate market. Definitely looking forward to ringing in the new year!