Posted by: phillipsre | December 30, 2013

Housing Market in 2014 – A look to the Future

futureAs the year comes to a close, it is always interesting to look to the future and imagine what the New Year might hold for us. The folks at Huffington Post and Trulia have some predictions for the housing market in 2014. This article features the 5 major areas that the housing market will be different in 2014 that it was in 2013.

  1. Houses will be less affordable  Pricing might not be as unstable as it has been, but the cost of homes will increase more than incomes and rents. So it will still be cheaper to rent than buy.
  2. The buying process will be a little easier or less frenzied – Even if prices were lower in 2013, the process will be easier in 2014. There will likely be a little less competition because the inventory will be higher with all the new construction going on and mortgages should be easier to get because higher rates have slashed refinancing activity and pushed some banks to ramp up their purchase lending.
  3. Repeat Buyers Take Center Stage – The higher prices may turn away investors and first time home buyers, those looking to buy will be the folks looking for home #2 – they will be selling their current house (at a higher price – hopefully), allowing them to purchase the next house up.
  4. How Much Prices Slow Matters Less Than Why And Where  If prices are slowing for the right reasons, great: growing inventory, fading investor activity, and rising mortgage rates are all natural price-slowing changes to expect at this stage of the recovery.
  5. Rental Action Swings Back Toward Urban Apartments – Urban apartments will be the first stop for many of the young adults who find jobs and move out of their parents’ homes. Its possible that 2014 could mean more supply and demand for urban apartment rentals.

Some other reasons that 2014 may be different: New local markets will take the spotlight. Seattle makes the top 10 markets to watch list, entering 2014 with strong fundamentals, including recent job growth and longer-term economic success, as well as recent construction activity typical of vibrant markets.

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