The long-suffering housing market has been licking its wounds and recovering slowly. This year, it is expected that home sales will see a staggering 25 percent increase! As an investor, you need to adjust and adapt your investment strategy to the prevailing market conditions. In order to get the best option for your investment, these are the things you need to keep in mind:
Here to Stay
Lawrence Yun, chief economist of NAR or the National Association of Realtors, predicts that home sales will continue to rise for the next two years. His projections also include the national median for home price will keep rising at a steady rate of 4 percent per year. David Crowe, the chief economist for National Association of Home Builders, predicts a 15 percent increase in multi-family housing this year. Daren Blomquist, vice president at RealtyTrac, claims this year is going to favor house-buyers rather than house-flippers. There has been a 4 percent decrease in properties that are being flipped. Auction.com – one of the biggest real estate markets – supports this claim; their survey confirms that people all over the country are favoring buying property to hold and rent flipping.
Trends
There is a difference in investor intent between investors, depending on whether:
- The investor is online or offline
- Where the investor lives
- Which property is the investor interested in
Auction.com’s study showed that while people in the Northeast preferred flipping to buying, in the Midwest and South, buying was more prevalent. In the West, both options are availed equally.
Baby boomers will be making a move this year. People are downsizing and moving so that they will be closer to their family.
More people could be qualified for home loans as issues for two reasons: announcements by Freddie and Fannie that have started a mortgage plan with 3 percent as down payments, instead of the conventional five; others may soon follow this trend. The second reason is foreclosures or short sales will age out of their credit reports this year.
Top Housing Markets
Favored – Home Sales Growth and Demand Will Exceed Supply
Reasons – Below Average Metro Area Unemployment; Higher Job Growth
Favored – Growth in Household and Home Sales
Reasons – Growth in employment and income; affordable
Predictions – 6-7% increase in homeowners in the next five years
Favored – Growth in New Construction
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
- Funds are available to U.S. Businesses NOW
- This is not a loan. These tax credits do not need to be repaid
Reasons – One of the five top markets for new construction; Population Increase; Affordable
Washington D.C.
Favored – Growth in Households and Demand Will Exceed Supply
Reasons – Diversified Economy – Tech Sector on the rise
Predictions – One of the top five cities for new household formations for the next 5 years
Favored – Growth in Millennial Homeowners and New Construction
Reasons – Low Unemployment Rates; Higher Proportion of Young Residents; Affordability; Strong Economy – Household income is $83,000, while national income is $64,000; Construction Growth
Des Moines, Iowa
Favored – Growth in Millennial Household Numbers and Shares
Reasons –Affordable – median-priced houses are $180,000 as opposed to the national median of $221,000; higher percentage of Millennials; Local Unemployment Rate is 4%
Favored – Growth in Household and Home Sales Volume
Reasons – 3 % Growth in employment; Affordable; Strong Construction Market
Predictions – Home Prices will see 3% growth; 7% growth will be seen in Home Sales
Favored – Growth in Households, Employment, and Home Sales Volume
Reasons – Employment rates are bouncing back to pre-recession numbers.
Favored – Growth in Households, Employment, and Home Sales Volume
Reasons – Rate of employment is twice the national rate; Strong Construction Sector
San Jose, California
Favored – Demand Will Exceed Supply
Reasons – Influx of Tech Workers; Higher Employment Rate and Wages
Predictions – 7% increase next year
Hope this article is helpful to all the buyers out there. Happy House Hunting in 2015!
