Market Watch
Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), recently gave his annual forecast for home sales for 2014. Dr. Yun has been the chief economist for NAR for several years and was recognized last year by USA Today as one of the top 10 economists in the country.
His estimate for sales of existing homes in 2014 is 5.12 million homes, virtually identical to 2013’s 5.13 million sales. He expects new home sales to reach 508,000 in 2014 compared to 429,000 in 2013. This forecast says total sales will be essentially identical to last year. Although sales may remain flat he expects prices to rise 6% over last year. Steady sales with healthy a price increase is actually pretty impressive when one considers how much sales and prices have improved over the past two years.
Over the past two years cumulative unit’s sales have climbed 20% and prices have increased 18%. Those kinds of increases are clearly not sustainable which make this year’s prediction very positive. Although prices are up Dr. Yun points out “We’ve come off record high housing affordability conditions in the past year, and are now at a five year low, but conditions are still the fifth best in the past 40 years.” Dr. Yun also said that limited inventory; exacerbated by low numbers of new home construction, as well as a tsunami of new federal banking regulations, would hold back home sales.
As is always the case, national statistics are interesting but your home or the one you are thinking about buying are even more interesting. Trends in our market have been similar but less pronounced that the national numbers. What is accurate locally is that although sales and prices have increased, homes are still very affordable. If you would like to know the market value of your home or you are ready to start looking for a new one give me a call. Although real estate is somewhat seasonal, homes do sell during the holidays and in January. There is less competition in the winter and buyers planning to buy in the spring usually start looking months before they buy.
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