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2014 Real Estate Predictions
National Association of Realtors (NAR) chief economist Lawrence Yun gave some 2014 real estate predictions recently when speaking to the 2013 Realtors Conference and Expo, predicting steadiness in existing-home sales over the next year as prices continue to rise.
Looking over the past year, Yun said he expects existing home sales to be up about 10 percent in 2013 to 5.13 million. Sales in 2014 are expected to hold fairly even at about 5.12 million.
Reviewing price movements, he said the national median existing home price should end this year about 11 percent higher than 2012, climbing to $197,000. Next year's growth is expected to be cut nearly in half at about 6 percent.
Over the past two years, Yun says existing home sales have shown a 20 percent cumulative increase, while prices have gained 18 percent. Meanwhile, incomes have only barely risen, coming up somewhere between 2-4 percent.
Aside from affordability, ongoing headwinds include limited inventory conditions and stringent mortgage standards, both of which are expected to continue as housing starts struggle and business costs remain elevated for lenders.
Sales of new homes are expected to total 429,000 in 2013 and 508,000 next year.
Meanwhile, Freddie Mac has weighed in on 2014 real estate predictions as well, and predicts next year to likely be the first year since 2000 that home purchases outpace refinances.
Predicting exact outcomes for any market is nearly impossible. Uncertain Fed policy and government negotiations over the budget and debt ceiling could disrupt economic activity and throw all these predictions right out the perverbial window in the first part of the year.
Stay tuned to this website and we'll keep you up to date throughout 2014 on Vero Beach real estate trends and news that may affect the industry.
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Biggest Challenge This Winter: Lack of Inventory
Prospective homebuyers hoping to buy a Vero Beach home in the next four months say the lack of inventory is their biggest challenge, but many believe winter is a good time to buy because sellers are motivated to sell and more willing to negotiate.
That's according to a survey of more than 1,300 visitors to realtor.com conducted from Nov. 7-16, which found 45 percent of buyers in the market said there's not enough inventory in their price range.
The survey also found that a surprising number of prospective homebuyers — 19 percent — are planning to do all-cash deals.
Of those planning to buy without taking out a mortgage:
- 29 percent said they are downsizing to a smaller or less expensive home.
- 26 percent are relocating buyers.
- 11 percent are moving up to a bigger or more expensive home.
- 11 percent are buying a vacation home.
While 28 percent said they were planning to buy because they are relocating, 19 percent were existing homewoners downsizing to a smaller or less expensive home, and 15 percent were move-up buyers. Nearly 1 in 5 of those surveyed (19 percent) said they were first-time homebuyers.
There were 2.13 million existing homes for sale at the end of October, NAR said, down 1.8 percent from September. But at October's slower pace of sales, it would take five months for all those homes to sell, up from 4.9 months in September.
Housing analysts generally consider a six-month supply of existing homes for sale as an even matchup of supply and demand — anything less can indicate that demand has outstripped supply.
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How Long Should Selling a Vero Beach Home Take?
If you're considering selling a Vero Beach home, probably one of the questions you're already asking is, "how long should it take?"
In September, the average home took 86 days to sell, down from an average of 116 days one year ago. That's a pretty significant improvement, and the market seems to be getting even better as each month goes by.
Time on the market will vary, of course, depending on many factors. Condition of your Vero Beach home, neighboring homes, the job market in the immediate area where your home is located, and many others. But generally speaking, time on the market is down almost everywhere in the country.
The declining inventory of Vero Beach homes for sale over the past year naturally creates pressure for buyers to more quickly snap up the inventory that is on the market. This demand has been fueled by huge price changes since the market tanked, historically low mortgage rates, and a slowly improving economic climate.
Many homeowners are still "underwater," unable to sell because, despite rising prices, their Vero Beach home is still worth less than they owe on the mortgage. The sluggish job market means fewer homeowners are selling to relocate for work. And tight credit prevents would-be sellers from getting the mortgage they'd need for their next home, trapping them where they are.
As for buyers, they should resist the urge to get into a bidding war or pay prices they're not comfortable with. And most of all, buyers should not feel desperate. More homes will eventually come on the market. On the other hand, prices of those homes and mortgage rates could be a good deal higher in a year or two.
