As we head into 2015, there’s no shortage of people making real estate market predictions for the new year. As always, predictions, speculations and forecasts have to be taken with a grain of salt. We can’t rely on them entirely when it comes to decision making. Still, it’s good for those of us investing in real estate to look at where we’re going as much as where we’ve been. Professionals do study trends and their forecasts do come from a place of expertise.
Here are just a few predictions to consider on our way into the new year.
5 Real Estate Market Predictions for 2015
1. First-Time Homebuyers May Make a Comeback
As the job market improves, we may see first-time home buyers gain the traction they need to start purchasing homes again. If we see millennial home buyers back on the market, they’ll have a profound impact on demand and building needs. For the past few years, the lack of first-time home buyers has led builders to focus on higher-end homes rather than more affordable construction. If first-time home buyers start returning to the market, we may see that shift.
As with the first point, home construction will be on the rise — with predictions ranging from a 25% to a 31% increase. If millennials return to the market, the demand for less pricey homes will return and encourage builders to meet that demand with new construction. Existing inventory will rise — which could spell good news for home buyers in highly competitive markets that have had to fight all-cash offers and too-quick sales.
3. Mortgage Rates Will Rise
In 2015, a percent increase in mortgage rates is expected. While this isn’t necessarily something people like to hear, it certainly could be a good thing — provided lenders adjust accordingly. Higher mortgages, if unchecked, could seriously hurt the real estate market. As home prices also increase, a rising mortgage rate could push cash-strapped buyers out of the market, which would negatively impact home sales and hinder mobility. If mortgage rates are going to increase, we hope that our last prediction comes true.
4. Dallas Will Surpass Memphis in Percentage of Home Sales
This is one of those predictions that hits closer to home. Memphis Invest has been growing year over year and is entering our third year in the Dallas market. We are making a major push to grow and develop the Dallas market and fully expect that in 2015, we will close more properties in Dallas than Memphis. This is a planned move on our part and 2015 will be the year that the transition happens. The Texas market, both Dallas and Houston are huge! They are on fire and they are fantastic investment markets. Our company is simply making a strategic shift to growing these two dynamic markets while continuing to offer the same great product and service in Memphis. We just plan on being a lot more picky!
5. Lending Standards Will Loosen Up
With the increase of mortgage rates, we hope to see banks ease up on lending standards. For the past few years, strict standards have kept many first-time home buyers from purchasing a home. If the standards don’t relax in combination with rising home prices and mortgage rates, it could spell bad news. If, however, banks do adjust, we could see a significant growth in home buying next year.
..........One last bonus prediction!
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Do you have any predictions for what the real estate market will look like in 2015? Share with us in the comments.