What real estate trends can we expect in the housing market for 2014? The New Year is bringing with it new predictions and outlooks for the housing market. The top real estate trends start with Millennials moving in and the top predictions include second-tier cities moving up. Read more to learn the top real estate trends and predictions for 2014 and see how these outlooks will affect the housing market.
#1: The number one trend in real estate for 2014 is that Millennials are moving the housing market, but not as homeowners. A lot of cities have seen increased economic activity in the real estate market from Millennials, including Austin, Seattle, Portland and Minneapolis. However, Millennials aren’t forming new households at the rate they should be or buying as many homes as their parents were, which dampen their effects on the housing recovery. I predict that Millennials will continue to hesitate when it comes to purchasing their first home.
#2: Another upcoming real estate trend is that second-tier cities, such as Dallas and Portland, will lead the housing recovery in 2014. Real estate investors, developers and builders are interested in these cities because housing prices are cheaper and there are more housing deals. The New Year outlook is for these second-tier cities to continue booming.
#3: The real estate recovery will also still hinge on job growth in 2014. Slow job growth is holding back both the housing recovery and the economy, and that’s not likely to change anytime soon. Without a jump in job growth, I predict that homeownership will remain stagnant in 2014.
#4: Experts say the so-called “smile investing” philosophy for real estate investing is back. That’s where real estate developers and investors look at cities in the Northeast, and then move south to the cities along the Sun Belt and come back up to the Northwest. So you should expect to see more housing activity in those real estate markets than in the Midwest.
#5: There will be less multi-family apartment building construction in 2014. During the Great Recession, many homeowners started renting apartments, causing multi-family construction to surge. But that’s likely to quiet down next year, since there’s an abundance of multi-family units available.
#6: When it comes to housing trends, experts say condo development will still be on the back-burner in 2014. The condo market hasn’t recovered as much as the single-family housing market and condo developers don’t want to take the risk, so don’t expect it to be a top real estate trend in 2014.
#7: A good housing recovery sign is that real estate inventory is coming back. Experts predict that 2014 will be the last year that low inventory will aid property prices. The lack of home inventory is improving and home sellers are getting better profits than they have in years.
#8: The home buyer’s market is long gone and homes are now priced to please sellers. Home sellers know they can get eager buyers to buy homes before interest rates and home prices increase even further.
#9: Shadow banking is starting to emerge and it may take on a larger role next year in the mortgage lending market. It’s similar to traditional bank lending, but but it’s done outside of banks and can therefore get around bank regulations. This could play a large role in home buying and selling in the real estate industry.
#10: The last real estate outlook for 2014 is that suburbs are going urban. Interest in real estate development for suburban areas has waned. Instead, urban-minded projects are gaining popularity, especially in cities with easily accessible amenities and public transportation.
These are the top 10 real estate and housing trends, predictions and outlooks for 2014. Overall, I think the housing recovery will make a steady climb up next year, but we still aren’t there yet.