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I am optimistic about the real estate market in 2014 for a number of reasons. First, the world economy is recovering strength. Aggressive monetary policy is easing internationally, and along with it the short-term interest rates that, in many countries, have remained at near historic lows. Pent-up demand is also helping to reinvigorate global property markets, and inflation-adjusted home prices strengthened in 2013 in many countries. The turnaround is most notable in the U.S and U.K., but prices are rising again in some emerging markets as well, including China.
Nationally, I expect about a 4 percent increase in existing-home sales, to 5.2 million, up from nearly 5 million in 2013. That’s a chipper 7.5 percent increase over 2014. Prices will rise by about 3-5 percent, a slower, steadier pace in line with historical trends. I also think more young people will purchase homes, a result of constrained demand among younger buyers who are no longer hampered by lack of jobs or insufficient incomes.
The supply of homes for sale stands at five months’ worth, which slightly favors sellers. Dallas’ supply is about three months. This shortage will likely persist throughout 2014.
New-home sales may climb by about 16 percent following a 36 percent increase in 2013. Due to the 16-day government shutdown last October, figures for building starts and permits were delayed. Overall, the number of permits will likely continue to exceed sales of new homes, eventually boosting inventory.
Another trend involves the growing number that can afford to buy “trophy homes” but are strategically opting for trophy rentals instead. They avoid tying up money in steep down payments, choosing to invest in the financial markets or their own businesses.
Speaking of rentals, the residential rental market should continue to experience positive momentum. Look for an active pipeline of development for the next two or three-years particularly in Raleigh, Austin, Charlotte and Washington, D.C., with other markets expanding too.
Robbie Briggs, President and CEO | 1.847.780.6499 | firstname.lastname@example.org
Serving the Metroplex from our office at 5600 Lovers Lane, Suite 224, Dallas, Texas 75209. For more beautiful homes, see briggsfreeman.com. Also see updatedallas.com for the latest in real estate news. CEO Robbie Briggs independently owns and operates Briggs Freeman Sotheby’s International Realty.