A 2013 Recap and Real Estate Market Projections for 2014
2014 started off slow with the perceived “cooling” of the real estate market. Also, it started the end of Ben Bernanke, the introduction of Janet Yellen as Fed Chair, and job creation lower than previously expected.
The housing recovery has pushed homes prices in most cities across our nation. Nationwide, prices rose by 10.9%, pushing the median price for existing homes up by $30,000 to $215,000. While prices continue to increase, homes are still affordable and on average 31.5% lower than their prices during the 2006 peak.
Housing Market Increases
Historically, low mortgage rates created a sense of urgency in 2013. Hence, traditional homebuyers took advantage of the still-affordable homes. This happened even as “good deals” were not available. Therefore, investors and other buyers were quick to engage in bidding while offering up cash for properties. Markets that were recently seen as “duds” quickly gained desirable status. One such city is Las Vegas which led the nation with a 32% increase in home prices.
Market observers agree that home prices will rise in 2014, but at a slower, steadier pace compared with historical trends. Most analysts project that home prices nationally will increase by 3 to 5% in 2014.
Finally, as we continue to see an increase in home prices, more existing homeowners will start selling and buying homes. CoreLogic reports that almost 3.5 million homeowners lifted out of negative equity between the end of 2012 and mid-2013. Nevada, Florida, Arizona, Michigan, and Georgia have the highest shares of underwater homeowners.