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In 2013 the real estate market recovered, and in 2014 I'm expecting a year of growth with demand for housing on the rise, as well as 46 of 50 states showing economic improvement.
I've pinpointed 4 factors that will explain a rise in the demand for housing:
- The repeat buyer: With lots of people having negative equity in the past years, which creates an impulse for them to move up or move down into new homes.
- Immigration Reform: Nothing political about this one, but I expect some changes in immigration legislation, which will cause a significant segment of our population to seek permanent housing.
- Millenial buyers: As graduates move away from home or away from high renting prices, they will seek mortgages that can be cheaper than renting prices.
- Job Growth in Texas: Upwards of 70,000 jobs are being created in the Houston area alone, which is really driving up economic demand for housing.
However, our current supply of houses in Houston is not able to keep up with the demand, so expect new construction as well.
One big surprise that I expect to see is with interest rates. At about 4.5% right now, we expect to see them rise steadily throughout the year, and could go up to 5.5% by 2015. However, we don't expect these hikes to affect the purchasing power of consumers in Houston, because the job creation here should balance out that factor.
Overall: 2014 should be a good year for both buyers and sellers in Houston. Buyers will receive great rates and sellers will experience a high demand.
I wish you a very happy and prosperous 2014, and I'll be back with more market information soon.
