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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 Columbia SC 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 Columbia SC 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 Columbia SC Home Take?
If you're considering selling a Columbia SC 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 Columbia SC 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 Columbia SC 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 Columbia SC 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.
Passage of immigration reform could be a boon to the Columbia SC real estate and mortgage markets over the next decade.
How Columbia SC Real Estate Could Benefit
If Congress approves legislation providing a pathway to citizenship for undocumented immigrants, the National Association of Hispanic Real Estate Professionals (NAHREP) expects the country's pool of home buyers to swell by three million, generating some $500 billion in new mortgages. The $500 billion in real estate transactions would also generate $25 billion in mortgage origination and refinance income.
The estimates are based on the assumption that some six million unauthorized immigrants would probably pursue legalization if given the opportunity. That's a little more than half of the total number of unauthorized immigrants in the United States, which the Pew Research Hispanic Center estimates to be 11.1 million. Almost 60 percent of those are Mexicans. The association calculated that about three million of those who would pursue legalization would also buy homes.
Gary Acosta, the chief executive of the real estate association said recently, "It's not what we expect to happen in a year or two, but over 5 to 10 years. These are people who can't get mortgages right now, and they're primarily living in the shadows."
Hispanic households are already a strong force in the nation's housing market. A previous report from the association found that from 2000 to 2012, the net growth in new-owner Hispanic households was 58 percent, versus 5 percent for the rest of the American population.
Stay tuned to our Columbia SC real estate blog as we monitor this ongoing reform effort.
Many consumers say they are interested in buying a home but they put off their search just because it’s cold outside, it gets dark early and they think there will be more “opportunity” in the spring. The truth is, there are plenty of opportunities now and reasons why buying Columbia SC real estate is possible and even advantageous in the winter months.
Reasons Why Winter May Be Your Best Time to Buy Columbia SC Real Estate
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he best time to buy Columbia SC real estate could be now because many home buyers tend to wait until the spring and summer to house-hunt, so there will be less competition, giving you more opportunities to make an offer. If the sellers themselves would like to be in a new home by spring as well, you have an even greater chance of your offer being accepted.
- As a result of less home buyer activity in the winter, your real estate agent can give you more one-on-one attention. Instead of trying to satisfy many people at once, agents and brokers can focus more on your needs before the spring influx of interest begins.
- Not only are Columbia SC real estate prices affordable, but mortgage rates are still near all-time record lows, which means the sooner you can obtain a signed purchase agreement, the sooner you can lock in an interest rate that suits your pocketbook. While no one can predict how long rates will last, it’s a win-win situation if you can buy the home you want at a comfortable monthly payment you can afford.
- Because you started your search in the winter and your agent was able to spend additional time finding the perfect home, you can relax when spring rolls around. Many home buyers will just be getting started, while you will be relaxing with moving plans already underway.
So before you get the chills just thinking about looking at Columbia SC real estate now, bundle up and relax knowing you’ve got a head start on all of the other potential home buyers who won’t begin their search for another few months.
Columbia SC real estate finally saw a turnaround in 2012. The good news is for home buyers and investors. If you’re considering buying Columbia SC real estate to live in or use as an investment, 2013 is shaping up to be another terrific year.
A Look Back at Columbia SC Real Estate in 2012
–>Roughly 23 percent of homeowners are underwater or are nearly underwater with their mortgages, according to third quarter 2012 data from CoreLogic.
–>Zillow estimates that U.S. homes gained $1.3 trillion in value during 2012, the first year of cumulative gains since 2006. The Case/Shiller Housing Index showed that home prices rose about 2 percent in much of the country. Anything in positive territory is a big gain for homeowners.
–>New home sales remain low, with only an estimated 368,000 sold in 2012, according to projections from the Department of Housing and Urban Development (HUD). Still, that’s up about 17 percent from a year earlier. The median sales price of new homes was $237,700 in October, due to the supply of new homes being very low. At the current rate of sale, the 147,000 new homes on the market would sell in 4.8 months, a historic low rate.
–>Existing home sales reached an adjusted annual rate of 5.04 million in November, up 14.4 percent from a year ago, according to the latest figures from the NAR. While NAR concurs that home values are rising, about 22 percent of home sales were foreclosures and short sales, which sold for deep discounts. Still, even the percentage of distressed sales is down from 24 percent a year ago. And the number of homes on the market is now as low as it was back in 2001.
–>Mortgage interest rates fell to historic lows in 2012. You can get a 30-year loan for around 3.35 percent, a 15-year loan at less than 3 percent and a 10-year loan for around 2.85 percent. All of this assumes you have excellent credit and at least 20 percent equity in the property you’re buying or refinancing.
The good news is that HARP 2.0 has kicked into gear, and as lenders get used to working with borrowers on its terms, more homeowners are qualifying for a refinance.
When we look back over 2012, it’s clear that the Columbia SC real estate ship has turned. However, if the country falls back into recession, the small amount of progress made could easily reverse. The real number to watch is employment: Without a good paying job that allows homeowners to afford their mortgage, it’ll be tough to generate the kind of strong housing market that Americans have come to rely on.
Stay tuned to our site for more updates on Columbia SC real estate as we progress through 2013. Good or bad, we’ll keep you informed on anything and everything that affects Columbia SC real estate values.
Thinking of moving some extra cash into Columbia SC real estate, or investing in property elsewhere, or just paying down your current mortgage? Here’s what CNN Headline News Money expert Clark Howard advised one of his viewers to do…
Questions or comments? We’d love to hear from you. Just use the comment link to contact us about any Columbia SC real estate related questions.