It’s impossible to know exactly what the real estate market will do in 2015. However, what are the gurus forecasting? How hot, or not, will the spring market be?
So far, most are predicting a positive outlook for early 2015. With much of the housing hangover from the late ‘00s bubble behind us, the real estate market is still showing signs of recovery and growth. Here are 6 signs that spring 2015 won’t leave the US real estate markets too chilled.
1. Consumers Are Optimistic
According to a recent Trulia article on Housing in 2015, US consumers are more optimistic about the US housing market.
The market has not completely recovered yet, but it’s getting there. The article explains: “None of the five measures we track in our Housing Barometer is back to normal yet, though three are getting close.” The real estate market is no longer as undervalued, after substantial rebound from its collapse after the housing bubble.
Consumers are more confident than they have been since the financial meltdown of 2008. A full 74 percent of those polled stated that owning a home was still an important part of their American dream and a whopping 93 percent of young Americans who are currently renting reported they plan to buy a home in the future.
2. Housing Rebound is Slowing Down but Still Exists
For the last two years, investors have been buying up undervalued real estate. As prices normalize, the rebound is slowing down. This may mean less action on the housing market for 2015. However, the good news is there are still deals to be had. Appreciation speed may be slowing, but prices continue to rise.
According to another Trulia article, some markets buck the trend. Real estate appreciation is still going strong in 40 metro areas in the US. Many markets in the Midwest and the South are still hopping.
3. Signs of a Healthier Market
According to a MSN Money article, the market is showing signs of being healthier. Prices are now being influenced by fundamentals and homeowners, rather than government interventions and foreclosures.
Prices are stabilizing and returning to more expected levels of growth. Homeowners will have less competition when looking to buy a house in certain markets, since investors are no longer driving up prices.
Another sign of a healthier real estate market is that homeowners are generally back to having positive-equity in their current homes. This will allow owners much more flexibility when it comes to housing. Some may finally be in a position to sell or relocate. Others will take the opportunity to upgrade to a larger home.
4. Foreclosures are Down
Another positive sign for the US real estate market is that the foreclosure rate is down by one third from last year. According to MSN Money, September foreclosures are down by 33 percent nationally, and down 60 percent since 2010.
The forecast for foreclosures is optimistic for 2015. Many predict the rate will continue to decline, which makes for a stronger, less volatile real estate market for the spring and beyond.
5. Mortgage Interest Rates Remain Low
According to a Bankrate.com article, US mortgage interest rates have actually fallen for the last few weeks. Possible explanations include the fall of the Russian ruble and other international instability as well as dropping oil prices. The higher than usual market volatility has many Americans turning to safer investments such as Treasury bonds, which tends to lower interest and mortgage rates.
Many in the industry were expecting mortgage interest rates to already be on the rise. With talk and predictions of rates going up, current renters may try to get into the market and lock-in low interest rates before it’s too late. And since spring is traditionally the busiest time of year for home sales, we could see a hot real estate market in the coming months.
6. Rent Rates Are on the Rise
In many big cities, market rental rates are on the rise. This is good news for those interested in purchasing income properties. It’s also a sign of increased demand in the rental market.
These rent increases may push many current renters into entering the housing market for the first time. Since the doom-and-gloom of the housing bubble is over and confidence in the market is on the rise, renters may feel convinced it’s the right time take the plunge.
What are you seeing in your local real estate market? Are you seeing signs of a hot market for spring 2015?