Top trends expected in real estate for 2014
This year, however, the Newport Beach, Calif., real estate broker anticipates his side business will slow down because foreclosures and short sales are drying up.While 2013 was the year of get-in, get-out quick house flips, he expects to do more in-depth remodeling work on higher-priced properties in 2014. “Since there are fewer short sales and fewer foreclosures out there,” Cole said, “there's less business to go around.”Many economists agree. They predict 2014 will see more investors retrenching and more buyers putting roofs over their own heads. That's not the only big change ahead. Home prices are expected to stabilize this year, while homebuilding will be more frenetic.“The housing market has staged a spectacular recovery over the past year,” Cal State Fullerton economists Anil Puri and Mira Farka wrote in their 2014 economic forecast. “More recent data, however, point to a softening of these trends.”In New Hampshire, the 2014 recovery is not expected to be as noticeable, but that's because the state was not as bad off that most of the country during the economic downturn.
“A lot of the (national) market dipped deeper than we did in New Hampshire,” said Russ Thibeault, president of Laconia-based Applied Economic Research, “so other parts of the country will see a stronger rebound that we'll see here. In a nutshell, the national figures reflect a much deeper downturn and so will see a bigger upswing. New Hampshire will have a pretty good 2014, but not a stupendous one.”Here are the top real estate trends the nation will likely to see in 2014, according to Puri and Farka.
You can expect to see more people putting their homes up for sale this year, as rising prices bring new equity to underwater homeowners.Other property owners also may take the opportunity to get their lives off hold and take advantage of higher home prices.
Another factor: New home construction is expected to increase further this year, further boosting options for home shoppers.“It's still a good market for buyers and sellers, and as we move into a more stable market it will help move the market forward here and across the nation,” said Thibeault. However, he warned homebuyers should think ahead when applying for mortgages.“A lot of buyers are taking advantage of adjustable rate mortgages. We are in a rising rate environment already and that will continue. Buyers should look ahead and make sure they can still afford the mortgage down the road.”According to Steve Harney, president and founder of Keeping Current Matters, an organization which tracks and analyzes real estate trends, 2013 was the year of stabilization in the market.
“This is the year that the market really came back and became more normalized,” said Harney of 2013, in a news release.“Inventory was at five to six months and prices shot up across the nation. This will level off in 2014, however, and I don't think we'll be looking at double-digit appreciation.”
Single-family, condominium and multi-family home transactions were strong throughout New England in 2013. With the exception of Vermont, which experienced a 3.3 percent decline in multi-family home sales, each state experienced growth in all three categories of transactions.This is reflective of a larger trend throughout the Northeast and the nation, where single-family home sales in the region are up 9.9 percent on average according to Multiple Listing Service data, a service provided by REMAX and other real estate groups.New home sales to riseNationwide, forecasters expect the number of housing starts to range from 1.19 million to 1.25 million, up from 975,500 in 2013.
Builders are compensating for years of sub-par construction levels, said Robert Denk, an economist with the National Association of Home Builders. “There's a huge construction deficit,” he said.An increase in homebuilding means that new home sales should go up, too.
When construction levels fell, “buyers were forced into resale homes,” said Irvine, Calif., housing consultant Mark Boud. Many buyers prefer newer homes, which have the latest designs and are more energy-efficient.“The reason (new home) sales will increase is we are supplying more product,” Boud said.
Thibeault also sees an increase in that area for New Hampshire in 2014.
“Home construction has been in the doldrums but I do see more houses being built and that, in turn, drives the construction trades.”Thibeault sees the number of new homes being built in New Hampshire to hit the 3,000 to 3,500 range, up a few percentages points from 2013. Pricewise, he said new homes costs were up about 5 percent “and that would be an OK market for us.”Mortgage rates to rise
Interest rates for 30-year, fixed mortgages likely will rise this year, averaging somewhere in the 4.9 percent to 5.3 percent range, forecasters say.
That's still low historically, but well above rates for the past 2 1/2 years.The average rate for a 30-year fixed mortgage had been solidly below 4 percent since late 2011. Last summer, it spiked to 4.5 percent.
The Federal Reserve's decision last month to start reducing purchases of Treasury and mortgage-backed bonds likely will push up mortgage rates. But not wildly, said Thibeault.“Rates are not going to soar because we're still in a pretty weak economic recovery,” Denk said. “When the dust settles, (rates) are still a bargain.”
“Interest rates certainly will rise this year,” said Thibeault, but he said they will still remain low overall.