2015 real estate market trends
The last six years have been tumultuous at best as our nation has been left picking up the pieces of a rather dramatic housing crash. Homeowners have been underwater for some time, and many would-be buyers have been pushed out of the market by overly tight lending conditions and higher down payment requirements. Foreclosures caused values in neighborhoods to suffer, some even turning into blight homes, abandoned for years.
But the pendulum has been very slowly swinging, and the slow-paced recovery has been in progress for some time. Our nation will not be going back to mortgages given without any income proof, and robo-signing mistakes are finally being rectified, and we’ve learned some important lessons as a culture. Now, we’re finally getting our heads above water, and while we’re not exactly walking on water, many people are in a better situation economically than they were just a year ago.
We’re not alone in our analysis that the housing market is in a slow pace of recovery, in fact, realtor.com Chief Economist, Jonathan Smoke states that 2015 is the year of recovery, and that unless you are in some isolated areas in the slower moving Judicial states, we can can close the book on the foreclosure crisis.
Smoke notes that there are several factors at play in 2015 being a better year for real estate:
- Lending is becoming less restrictive, and programs are launching that set the stage for more home buyers to qualify. The volume of home buyers has diminished because of tight lending, but Smoke says they’re about to make a healthy comeback.
- New home construction (one of the hardest hit sectors of the economy) is rebounding, and even though lot availability is limited and labor and material shortages are a challenge, he expects single family starts to grow 21 percent.
- Contrary to his and other analysts’ projections, mortgage rates remained at historic lows in 2014. Because of moving pieces at the federal level, they aren’t likely to stay down, and Smoke projects they’ll reach 5.0 percent by the end of 2015.
- Smoke forecasts that home prices will continue to rise, increasing 4.0-5.0 percent in 2015.
- Millennials will play a bigger impact in the housing market, as they’re finally benefiting from a recovering jobs market and moving out of their parents’ homes. Gen X will sit tight, and Boomers will continue to downsize as their lifestyles dictate.
Although 2015 year is poised to be the year of real estate, challenges remain.
Smoke notes that inventory levels will remain tight, and although it is loosening, lending won’t be a cakewalk. Further, mortgage rates will rise, so buyers entering the market will see increasing monthly payment amounts. Most other factors are projected to improve the market.
In a video interview, Smoke answered dozens of questions posed on Twitter with the #HousingStarts hashtag (where questions are still being asked and answered). If you’re considering buying or selling, or if you’re in the industry, watch this over your lunch break to get all of the nitty gritty details and know more than your neighbors about the market:
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
Business Entrepreneur2 weeks ago
Entrepreneurs face higher rates of mental illness [part one]
Business Entrepreneur2 weeks ago
Many entrepreneurs facing mental health issues don’t get help [part two]
Business Marketing1 week ago
The use of offline marketing can still be advantageous in a digital world
Business News1 week ago
How to apply to be on a Board of Directors
Business Finance2 weeks ago
Follow these 7 steps to get outstanding invoices paid to you ASAP
Opinion Editorials6 days ago
3 reasons to motivate yourself to declutter your workspace (and mind)
Business Entrepreneur5 days ago
Having client difficulties? Protect yourself with an exit strategy clause
Business News1 week ago
Average age of successful startup founders is 45, but stop stereotyping