My Top 10 Predictions of 2014!
by: Jeff Quintin, on January 3, 2014 - Uncategorized
1. Home prices will stabilize. In the last twelve months, most metropolitan areas across the county saw an increase in prices. As far as our local South Jersey market, we haven’t seen much for price increases. Don’t expect a big upswing in overall prices in 2014; however, appreciation will occur in small markets where inventory is low. I believe most markets have hit the bottom of the market in 2012-13 with some still declining.
2. Home builders and new construction will compete with resale housing. We are seeing it all over the place; developers are back in the game and new construction is being built. Big homebuilders are buying large tracks of land all over the country especially here in South Jersey. With Sandy coming in and doing a lot of damage to properties, homeowners are not repairing themselves and selling to developers. New construction is going to dominate the 2014 market and compete with resale property.
3. Rental housing markets will surge and go up. Rentals are in demand and they have been very strong both across the country and locally. Rentals, especially yearly rentals, are very limited (low supply, high demand). If you have a property you want to put on the market as a yearly rental, you could have up to 20 applicants. There is a lack of good quality rentals and this will cause the prices to rise. This is also great for investors who buy a property and rent it to a good tenant.
4. Mortgage loan applications will rise and increase. We are seeing more and more people trying to get a mortgage or refinance. Lenders themselves have loosened up as more new homebuyers are entering the market.
5. Interest rates must go up. Interest rates have been very low for a very long time. All eyes will on Janet Yellen this year; she will become new chairperson of the Federal Reserve in 2014. Yellen will continue to monitor the bond-buying program but inflation will continue which will lead to higher interest rates. Interest rates can only be suppressed for so long. Sometime in 2014, interest rates will rise and hit 5%. Buy now and lock in the rates now.
6. Short sales and foreclosures will go away. Bank properties and REO (Real Estate Owned) Properties are being sold in bulk which is clearing out the short sale and foreclosure inventory. Locally, we’re seeing a surge in bank owned property again. For a long time, the state had a moratorium on foreclosures in the wake of Sandy. We will see more foreclosures in New Jersey versus the rest of the nation in 2014.
7. Investors will scrutinize and secure rental homes for long term. They are going to look at buying properties and be cautious with who they rent to. They want to make sure they acquire a good tenant who will stay long term and pay rent. More investors will come onto the market to buy more investment property.
8. Homes with curb appeal will lead market sales. Home buyers will be extremely picky in 2014; they will only buy the best home in the best condition at the best price. Buyers don’t want something that needs to be fixed up and this will cause the “junky” inventory to sit. Great curb appeal is going to help sell a home.
9. Housing inventory rises but remains low. There will be inventory coming on to the market but will remain low in some areas. Most economists agree that a healthy market will reflect about a six months’ supply of inventory. If there six or less months of inventory in a market, it would be considered a seller’s market or if there is more than six months’ supply, the market will favor the buyers. We will see both in different areas of the market next year. Locally, most of our markets have at least twelve months’ of inventory and are favoring the buyers. Until this is cleaned out, the market will remain stabilized.
10. Real estate offices will have more of an open space environment. Look for more boutique offices in 2014 and the decline of the larger real estate offices. There will be fewer personal offices and more collaboration between agents