-Interest rates will rise. Some predict 5.375% by the end of the year and others are saying it could be closer to 6%. As the ecomony improves the FED will have no problem increasing them.
–Home prices will continue to recover. We are up 15-20% over the peak of the market in some inner city neighborhoods.
–The Luxury Home market will continue to surge. There was an increase of sales of homes over $1m last year. In the west it was up 25.4%, midwest 36.4%, south 30.1% and the northeast 45.3%
-Multi-generational housing will continue to be a need.
According to the AARP, in 2008, 5.3 percent of all households, or 6.2 million, were occupied by multiple generations of families. That number rose to 7.1 million households by 2010, or 6.1 percent of all households – a growth rate faster than the previous eight years combined for a total of 51 million Americans (U.S. Census Bureau). This trend and need for suitable housing to serve the needs of not only our aging boomer generation as homeowners, but more importantly, their needs as primary caregivers for their rapidly aging parents and relatives, is only going to accelerate in the coming decade.
–The First Time Buyer will be back! With the economy improving, we believe they will finally be moving out of their parents’ homes and, when they compare renting versus buying, many will choose homeownership.
–The Move Up Buyer will FINALLY free up some inventory! Over the last several years many homeowners were trapped in their home by negative equity. This prevented them from moving up to the home of their dreams. With home values rising and home equity increasing, this pent-up demand will finally be released and move-up properties will be in high demand.
–Foreigners will continue to fuel our real estate market with their desire to park money here in the U.S. Typically they are all cash and they have a strong desire to invest in real estate here before the prices go up much further.