Looking to buy or sell a house in the New Year? Experts may disagree on the exact numbers, but they all seem to be forecasting a rosy 2015 for residential real estate. The housing market is expected to continue its recovery, though perhaps at a slower pace than in 2014.
Predictions vary significantly on new home sales. Realtor.com estimates that 2015 will see a 25% increase over 2014 while the National Association of Home Builders predicts an increase of 28%. These numbers are conservative when compared to the prediction of the National Association of Realtors, which believes the US will see a 41% jump in new home sales. In 2014 the new home market was approximately 440,000. That means a 2015 market somewhere between 550,000 and 620,400.
There are two factors that will lead to continued growth:
- increase in first-time home buyers
- increase in new home construction
Thanks to an improving economy with regards to growth in both available jobs and real wages, younger buyers will be able to begin thinking about purchasing their first home. This directly impacts Millennials who had to delay investing in a house or condo after the recent recession.
Builders are responding the needs to this group. While the past few years has seen a focus on more expensive housing, experts predict they will expand into units that are more in the price range of these first time buyers.
For sellers the question is what will happen with existing home sales. In 2014 sales of existing homes declined by 2%, but that trend will be reversed. One expert is predicting an increase of 8% in that market. So it may be worth it to keep that house on the market into the New Year.
Home prices are also expected to go up in 2015. Historically home prices rise between 3% and 5% every year. In 2015 that increase is likely to be at the low end of the range, around 3.5-4%.
All those figures are national. Individual markets may vary from those norms in sales and prices.
Here are a few of the markets where growth is expected to exceed the national average:
- Dallas-Fort Worth-Arlington (Texas)
- Houston-The Woodlands (Texas)
- Denver-Aurora-Broomfield (Colorado)
- Atlanta-Sandy Springs (Georgia)
- Los Angeles-Long Beach (California)
- San Jose-Sunnyvale-Santa Clara (California)
- Washington, D.C.
- Phoenix-Mesa-Glendale (Arizona)
- Des Moines (Iowa)
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