2014 Hampton Roads Real Estate Forecast
Real Estate is my business. As a business owner, I must be an expert in my field, provide excellent customer service, as I have built my business on referrals, and I must know my market better than anyone else. This practice of Real Estate takes constant education. Homes are being bought and sold every day, which means our market is changing every day. I attend a monthly course that focuses on our region’s economic factors. These factors include things like affordability, home value changes, number of homes sold/pending and active on the market, foreclosures, jobs, etc. You get the picture, the study is complex.
Here is what I see for 2014. We will have the best real estate market we have seen in 7 years. I say that for several reasons. 2013 brought a strong market for real estate but the consumer confidence was lacking. We saw the lowest mortgage rates in history, there was more demand than supply, and foreclosures were getting flushed out of the system. That means respectively, buying power is strong, homes listed sold faster and faster, and home values increased. Now that government backed loans are tapering (meaning rates will go up now), the media agrees that our economy has gotten better. When the economy gets better, rates increase, but so does consumer confidence, which makes for a good market to buy and sell homes.
The nugget I want you to hear out of this message: rates will increase. What will that rate increase do to your buying power this year? Rates are forecasted to hit 5-5.5% by the 4th quarter of the year (according to sources Freddie Mac, Fannie Mae, NAR, Mortgage Bankers Association). That means we may see a 1% or higher rate by year’s end. What does a 1% increase mean to you? It can’t mean much, right, 1% is nothing. Not true. A rise of interest rates by 1% decreases your purchase budget by 10%. If you were searching for a $400,000 home in Virginia Beach, you are now looking at a $360,000 home. Have you seen the difference in what you get for that kind of money? If you are thinking about buying a home this year, do not wait long. If you are looking at selling a home this year, you are in the driver’s seat.
The greatest part about all of this is that our home values will continue to slowly increase and those of us that may have been underwater, should be out soon, if not already. I have a feeling that most of you don’t realize how much your home is worth today. The media has preached doom and gloom for so long that we wouldn’t realize how much we could actually get for our home today. If you are curious, give me a call, you may be pleasantly surprised. My goal is to leave a neighborhood better than I found it. That means top dollar for my seller, and happy future sellers in that neighborhood!