IS 2014 THE YEAR OF GROWTH?
As we welcome in the new year, there is one question everyone in real estate wants the answer to. Will the housing market continue to improve in 2014? It’s not easy to predict what the market will do in the coming year, especially when the opinions of economists and real estate industry watchers are so varied. Fortunately, there are key indicators to watch, and those indicators are pointing in the right direction.
The housing market is impacted by the economy, job market, and consumer confidence. Consumers will make a down payment and purchase a home when they feel financially stable and secure.
According to December reports by the U.S. Bureau of Labor Statistics, total employment is projected to increase 10.8 percent over the next decade. The national jobless rate declined to 7.0 percent from October, signaling that the U.S. job market is slightly improving, and with it consumer confidence.
Another indicator is pending home sales. According to the National Association of Realtors® (NAR), pending home sales stabilized in November with a slight gain inching up 0.2 percent in November from October. The data reflects contracts but not closings. “Although the final months of 2013 are finishing on a soft note, the year as a whole will end with the best sales total in seven years,” said Lawrence Yun, NAR chief economist.
According to NAR, total existing-home sales in 2013 are expected to reach 5.1 million, a gain of almost 10 percent over 2012, but should stay at that level in 2014. The national median existing-home price for 2013 is up as well, nearly 12 percent from 2012. As home prices rise, housing inventory levels should rise as confident home sellers increase equity, making moving more feasible. More inventory will create more options for homebuyers and ultimately bring more opportunity to purchase their dream home.
While interest rates have risen slightly, they are still at historic lows. As long as the economy continues to improve and consumers remain confident, interest rates shouldn’t impact long term housing growth.
If you are in the process of buying or selling a home, please feel free to contact me to discuss these important factors. I know how local unemployment rates, pending sales in your immediate area, and the attached market data will impact your real estate goals.
I am hopeful that 2014 will continue to gain momentum bringing with it a vibrant economy and flourishing housing market. Happy New Year! I look forward to assisting you with all your real estate needs in 2014 and beyond.
Click here to view my Market Action Report for Fairfield County, December 2013