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Predictions for 2014: Sales Will Surge

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1.6 Blog VisualMany housing pundits are calling for home sales to do slightly better in 2014 than they did in 2013. To the contrary, we strongly believe that home sales will skyrocket with increases of 10-15% in 2014. Here are the three categories of buyers we believe will create this strong demand.

The First Time Buyer

The Urban Land Institute recently released a report, Emerging Trends in Real Estate 2014, projecting that 4.48 million new households will be formed over the next three years. Millennials will make up a large portion of these new households. 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

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. Zillow has just revealed that home equity increased by $1.9 trillion dollars in 2013 an increase of 7.9% in the last twelve months. With home values rising, this pent-up demand will finally be released and move-up properties will be in high demand.

The Immigrant Buyer

No one knows what will happen with immigration reform. However, we do know what such reform would have on housing demand. A recent study released by the Immigration Task Force of the Bipartisan Policy Center (BPC) found that immigration reform, if passed, would dramatically increase demand for housing units; increasing residential construction spending by an average of $68 billion per year over the next 20 years.

We realize that our projections are based on three situations that are still uncertain. However, we believe that these issues will come to fruition and thereby dramatically increase demand for homeownership.

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3 Responses to “Predictions for 2014: Sales Will Surge”

  1. Veronica Sims January 7, 2014 at 2:48 pm # Reply

    What about a Downsize (Empty-Nest) Buyer? This also has been a growing trend in the last years as the appetite for huge homes meets the reality of growing property taxes and utility bills.

    • Jim Koeneman January 12, 2014 at 9:48 am # Reply

      I agree with you. Older home owners should be another source of activity for the housing market.

  2. Stephen in Orlando January 15, 2014 at 12:42 pm # Reply

    I am very interested in seeing how this plays out, because there was another prediction that I read about following the Florida Realtors Annual Summit– the rate of home ownership could see another significant drop during 2014. Despite an improving economy, homeownership still remains unfeasible for many people (Millennials) who would have traditionally been at the stage where they’d be looking for their first home. Instead they are opting to continue renting. I know home values are expected to increase over the next year, so I am really interested in seeing what happens.

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