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2014 Predictions

by Stephanie Sims

Still A Slow Recovery?

One of the biggest questions on consumers’ minds is whether the market will continue its current pace toward recovery. As it stands now, prices are incrementally rising, inventory is still tight and mortgage rates are still low, which means the market is moving back to pre-housing bubble levels. According to the National Association of Realtors, home sales are at their fastest pace since Feb. 2007, when they were 5.79 million. In addition, home sales have remained above year-ago levels for the past 26 months.

That being said, in 2014, it will probably be more expensive to buy a home, because of higher mortgage rates and higher home prices – but only incrementally.

Will the market continue its current pace toward recovery?

• “I believe home prices will remain steady through next year, and they may even decrease. I don’t think it will change much. Historically, it becomes more of a buyer’s market during the early part of the year.” –Linda Feinstein, ERA Team Feinstein

• “Most of the major predictive indicators in Chicago from our forecasting model are firmly in historically moderate ranges. This includes shadow inventory, employment, pricing and consumer outlook. Home sales are now likely approaching a cyclical high, while mortgage rates are very low. Time on market and inventory are below average, but moderate. In 2014, it will likely require a significant shock to affect the current trajectory of the residential housing market. Our most predictive indicators are moderate, which means they have some room to move while still staying in the healthy range.” –Paul Lazarre, Leap Real Estate Systems

• “During 2013, the housing market showed its resilience, a trend which is expected to continue into 2014. However, this recovery has not yet stretched into all neighborhoods. The recovery to date has been somewhat spotty, as the improvement in weaker communities has lagged the stronger areas. This bifurcated recovery is expected to continue in 2014, with greater widespread improvement in the employment market still needed for a more broad-based recovery.” –Gail Lissner, Appraisal Research Counselors

• “The absorption of distressed properties has helped stabilize pricing. The market will continue to correct itself in 2014, with a likely increase in median home prices, ultimately predicated by how many sellers are motivated to list their home and make their move.” –James Votanek, North Shore-Barrington Association of Realtors (NSBAR); Baird & Warner

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