A Look at the 2015 Housing Market
Posted February 16th, 2015 by Moving Station

As the first quarter of 2015 is in full swing, real estate professionals are curiously watching the market trends. Of course, trying to anticipate what the real estate market will do is a task that can confound even the most seasoned experts. While keeping in mind that no one has a “crystal ball,” these here are a few things we anticipate could happen this year.

The market for buyers will improve. Buyers are seeing a perfect storm of conditions if they are positioned to buy in 2015. Home appreciation is expected to slow down with prices stabilizing, giving owners an incentive to sell before prices have a chance to dip. In addition, a booming stock market, strengthening economy and still low interest rates make now a better time than ever for new buyers to come into the market.

Yes, we just said rising home values will slow down. The housing recovery slowed noticeably in 2014, and many economists expect home values to rise even more slowly this year. This is partly because the rebound from the housing bubble has just about run out of steam. Additionally, surveys suggest that more homeowners are looking to sell their homes this year, and that increased supply should put downward pressure on prices.

Mortgage rates will rise. Mortgage rates are historically low, and many experts were surprised that rates did not increase in 2014. The collective opinion is that these low rates are unsustainable, and with the economy improving, rates should creep up. However, because rates have been low for so long, the rise will probably be a slow one, to avoid pricing new buyers out of the market.

Millenials may not be the answer. While many Millenials have expressed an interest in owning property, they aren’t necessarily expected to make a big impact on the overall housing market. This is because right now, Millenials prefer to live in markets such as New York City and Austin, Texas. These markets don’t have a lot of new construction available to meet the increasing demand, and that keeps prices high. Most Millenials still carry significant college student loan debt, and have not yet established solid work or credit histories, which will make it more difficult for them to secure financing.

Of course, all real estate markets are affected by local conditions, so even if all of these predictions do come true, the results will not hit all cities the same way: the historically affordable markets in the Midwest and South may continue to see steady growth; the severe drought in California could deter would-be buyers from investing in real estate; and Rust Belt cities, such as Detroit, Pittsburgh, and Milwaukee, are trying to repurpose themselves, which could provide new opportunities for businesses and investors alike. As always, we would recommend speaking to some local real estate experts about what you can expect where you live.

Leave a Reply

Your email address will not be published. Required fields are marked *