The New Year has just rolled around and everyone and their grandmother is keeping fingers crossed that 2015 will actually spell the end to the recovery from recession. As much as experts, buyers, sellers, and pundits might wish that this year marks a time of new found health for the property market, excessive optimism seems unwarranted. We’ve tallied opinions and information from the top sources for real estate news and trends, in order to bring you an overview of forecasts for this year’s state of the market.
#1: CNN – Mortgages may still remain inaccessible
This year, Fannie Mae and Freddie Mac have announced that they will loosen their standards for mortgage loans. However, as Moody’s Analytics’ own Mark Zandi explains to CNN, this doesn’t automatically imply that average buyers will have an easier time accessing mortgages. In fact, you may find that the CNN mortgage calculator is just as useful this year as it was in 2014. That’s mainly because most lenders still don’t trust potential debtors with less-than stellar ratings or without the money to put in massive down payments.
#2 Realtor Magazine: Metropolitan areas still rule
Although over the past few years some of the country’s largest metropolitan areas may have lost some steam, as far as their property markets go, in 2015 they’re back with a vengeance. Realtor Magazine’s chart of moving trends for 2015 states that Dallas, Denver, Houston, and Atlanta will see massive upticks in terms of population growth. The same source says this also applies to smaller met areas, such as Charlotte or Nashville. Pro tip: plan your move in advance to any of these destinations.
#3 First-time home buyers to make a comeback
It may seem counter-intuitive on first glance, especially given the factors cited above, but several top real estate agents, as cited by Yahoo’s Finance News, believe that 2015 is the year of the first-time buyer. That’s because hopefully the market will see some relaxation in lending terms, but also because of the progressive increase in rental prices. With rent costing more and more each day and rental prices rising quicker than millennials’ incomes, many of them will likely consider buying their first home.
#4 Multifamily housing units will remain attractive
Some sources have predicted that 2015 will mark the end of the love affair between (foreign) property investors and the U.S. multifamily housing unit segment of the housing market. Indeed, Russian investors no longer seem to be as keen on buying homes in the United States. However, as the Wall Street Journal real estate blog points out, this particular sector was exceptionally strong in 2014, with as much as $110.1 billion posted in sales. As such, it’s unlikely to witness a dramatic drop this year.
#5 Developers: The sale of new homes might pick up
Lennar, a Miami-based housing construction giant, has recently released the results of its 2014 market research study. According to this data, as cited by WSJ Real Estate, the sale of new homes has been gradually picking up steam. The quarter which ended on November 30, 2014, marked a 10 per cent increase in sales volume, on a year-to-year basis. So developers might just have a better year in 2015!