What does the new year mean for the housing market? Are we in for a bumpy ride or smooth sailing or something in between?
Our crystal ball looked a little murky (sometimes we get bad reception up here in Saskatoon) so, rather than make our own blurry predictions, we curated a few from industry and market experts. Here’s a look at what the Wall Street Journal, Inman, CREA, NAR and CNN have to say about 2014 housing market trends in the US and Canada.
Both Prices and Mortgage Rates See a Steady Increase
The Wall Street Journal predicts a stronger and steadier marketplace in the US in 2014. Mortgage rates are expected to continue their gradual increase, partly because the Federal Reserve is going to start pulling back on their bond-buying program. Prices, too, will rise, though likely not at meteoric 2013 rates. A survey of 110 economists resulted in an average forecast of 4.3% gain across the US.
In addition to investors, more families will join the mix of buyers leading to a supply and demand balance that looks optimistic for builders.
2014 Is the First Normal Year Since 2008
In this article by Inman contributor Ken Harney, it’s predicted that serious tax reform and other housing issues will be delayed at least another year, resulting in rather smooth sailing throughout 2014 – after some initial turbulence in the mortgage market early in the year (owing to new legislation taking effect). Inventories will rise as underwater owners transition into positive equity status and seller confidence remains steady, creating a better balance between supply and demand… even in hot markets like California.
475,000 Homes Will Be Sold By CREA Members this Year
In Canada, the Canadian Real Estate Association (CREA) estimates that 475,000 units will be sold in the coming year, a 3.7% increase from 2013. Additionally, the national average sales price is projected to rise to $391,100 (up from $382,200 in 2013).
Citing a stable market on a national basis – while acknowledging some volatility on a regional basis – this article contains detailed charts showing the forecast for each area. British Columbia is predicted to see the highest increase in total sales, whereas Alberta is considered likely to see the biggest rise in average sale price.
Growth in Home Prices Will Slow in 2014
It can’t all be rainbows and butterflies and rocketing growth, although as far as bad news goes, this is some of the nicest we’ve ever come across. The National Association of REALTORS® (NAR) reports that economists are predicting that housing prices will continue to rise this year, but only at about half the rate that they did last year. The upside is a better balance between buyers and sellers, resulting in a more sustainable recovery (although NAR forecasts a continuing seller’s market).
Markets to Watch: Seattle, Nashville, Salt Lake City
While Canadian markets to watch include Toronto and Calgary, CNN says these 5 cities are the next US hot spots: Oklahoma City, Seattle, Raleigh, Nashville and Salt Lake City. Click through to the slide show to learn more about each area and see why they’re predicted to experience real estate growth in 2014.
We hope you enjoyed this overview of 2014 real estate predictions. Isn’t it nice to find all of these sources in one place?
What is your #1 prediction for 2014?