There are some trends to watch for in 2013. Many real estate economists have voiced their views and predictions for this year so I have compiled a list of real estate trends they say we should watch for this year.
* Home prices on the rise – with new home construction picking back up, home prices are rising. Therefore, we can expect to see that patter to continue. Many real estate economists are expecting the average home price to go up 5% this year.
* Less foreclosure bargains – those bargain-basement foreclosures will probably get further and further apart and could even fade out. Hundreds of distressed home loans were sold in 2012 to buyers who have agreed to work with the distressed homeowners under new loan terms. Therefore, there have not been as many foreclosures as there once was.
* Increasing rents – the rental market should see rising rents as more young people enter the market. Many people in their twenties who have been riding out the bad economy by living with family and friends will probably start looking for their own place to rent. This could even present a problem in highly populated metro areas that don’t have enough rentals.
* First-time home buyers – we should see more first-time home buyers this year. The trend is already showing signs in an NAR survey of buyers and sellers that came out in November. The survey showed 39% of current borrowers to be first-timers.
* Short sales – You will still be able to find deals on short sales, which are homes that are being sold for less than the borrowed amount. Some real estate economists even predict that amount of short sales could rise this year.
* Higher building materials – home construction costs will go up as building materials like lumber, sheet rock and copper prices rise. Construction labor costs are also expected to go up this year due to an abundance of highly qualified construction workers coming back into the field.
* Mortgage rate increases – since mortgage rates have remained at historic lows for so long, many real estate economists are expecting them to go up this year. NAR is predicting a gradual increase to at least 4% this year, which is up from the low of 3.5% that we have been seeing.
* Property managers – since the FHFA began selling foreclosed properties in bulk to investors last year, it will be a great time to become a property manager. Many of the investors who bought the properties are hiring professional property managers to keep the properties rented and maintained.
For more information about housing market indicators and market data, you can visit the FHFA website at www.fhfa.gov, or the NAR website at www.realtor.org.