Here are some other housing market trends that we foresee in the coming year:
Low Interest Rates Will Continue…but not Forever
As mentioned in a previous blog post, interest rates are at all-time lows, but are predicted to creep back up to 5% by the middle and end of 2015.
More Millennials Entering the Market
Born between 1981 and 2000, this group is now larger than the baby boomers. For those in their late 20s and early 30s, they are now looking to buy their first home, as they get married and begin to think about starting a family. Helping to move this group along is the fact that rents are increasing and incomes are staying relatively stagnant, but stable. This is certainly great news for rental homeowners as the rental cap rate also significantly increased with the increase in the real estate prices, thus assuring more returns on the initial investment. Check out https://emeraldmanagement.com for best rental properties.
Foreclosure Inventory Declining
It has now been seven years since the foreclosure crisis and foreclosure inventory remains small and is declining. That’s good news for homeowners who were under water with their homes, but it also means that prospective buyers won’t have access to as many rock-bottom deals.
CoreLogic recently reported that foreclosure inventory had declined for 31 months in a row. Distressed properties are commonly priced below their true market values, which erodes home prices across the board even for non-distressed properties. So a reduction of distressed inventory helps to lift and sustain real estate values – that’s a benefit to all of us.
New Home Construction Starting to Increase
While 2014 wasn’t a banner year for the construction of new homes, 2015 looks brighter. There are still shortages in labor and building materials, which means that some new homes will be smaller and less extravagant than in previous years.
When you’re ready to buy or sell, contact Bowen Agency Realtors. We would be honored to serve you.