Real estate predictions are difficult to make, especially for the entire country. Different regions of the country and even different states and cities are recovering from the recession at vastly different rates. In areas where consumer confidence is up and unemployment is declining at the same time, the real estate market seems to be correspondingly strong.
Below we have compiled a few different predictions and valuable pieces of information about the real estate market in 2013 from our real estate and legal network.
1) A Tough Year for Buyers
According to Lynn Windle of Coldwell Banker,
“It’s going to be a tough year for buyers. Yes, buyers. For the first time in years, there’s not enough inventory in North Texas to satisfy the demand. Home builders significantly slowed construction in recent years and are just now ramping back up. In terms of pre-existing, good properties go quickly. By “good” I mean in relatively good shape.”
As the economy recovers, consumers are purchasing homes again. But new construction has dramatically slowed, so buyers are actually having a tough time finding quality real estate, at least in North Texas.
2) Prices have bottomed
Bruce Ailion of RE/MAX explains,
“All real estate is local so what’s going on in Boston is different from Atlanta, Miami, Dallas, or San Francisco, so there is no one good answer for 2013. Across all markets prices seem to have bottomed. Some are up because of low supply; there has been little to no new construction for the past 5-6 years. In some markets, speculative investor buyers have cleared the lower distressed inventory so average sales price are higher. This is deceptive. Where the market went off the rails was when real estate values departed from historic relative norms.”
Like Lynn Windle said, little new construction has occurred in the last few years, causing prices to drop to the bottom.
3) A Slow Recovery
Richard Koller of Tauscher Cronacher Engineers gives more advice on the topic,
“We can comfortably state that the home market has gone up this year and we do expect it to maintain the same pace. With that said, however, it should be clear that the pace is very, very slow. In fact it is often less than 1% of the previous years numbers, and very far below the 2009 numbers.”
Economic recovery has begun, but at a slower pace than ever before.
4) Seller’s Market
Spencer Krull explains,
“We are actually experiencing a huge seller’s market in almost every area of the greater LA Area (Santa Monica, Mar Vista, Venice, West Los Angeles, Brentwood, Cheviot Hills…) due to low inventory and really low interest rates. I think that sellers who are holding off their properties are going to wait too long to list their homes, will price them based on their expectations (instead of market comps) and that come August, we’ll have a glut on the market so that buyers will have an easier time of it.”
In the Southern California region, sellers are seeing a golden opportunity again. Interest rates are low for buyers and there are few homes for sale, so sellers have the advantage to price high.
Based on predictions being across the board, it is apparent that the real estate market forecast for 2013 is unclear, there are too many unknowns with laws and the economy. We will revisit this subject at the end of 2013 to see how the market fared for real estate this year.