The upbeat real estate market news in 2013 presents some unique challenges as we progress into the 2014 spring market, according to Realtor Magazine. An influx of buyers in 2013 helped strengthen housing appreciation, which in turn led to greatly improved consumer confidence. The result was 5.1 million home sales nationally - the best since 2007.
2014 is expected to be different, with sales volume gains expected to be small at best due to rising interest rates and home prices. Lawrence Yun, Chief Economist for the National Association of Realtors, says that even though sales volume gains will be down compared to 2013, the upside is continued growth in the economy.
The resulting addition of more than 2 million jobs each year should provide a boost to housing markets. He says on the commercial side, rising rents and declining vacancy rates bode well for the industrial, retail, office and multifamily sectors.
Yun says lenders could promote stable markets in 2014 as they look to purchase-money-mortage loans as their next big growth area to compensate for a shrinking body of business from refinances, which will drastically fall as interest rates rise.