Bold 2o14 Predictions From Zillow

Posted by JoAnn Doss on Thursday, December 5th, 2013 at 6:50am.    1031 Views

Zillow's Four Big Predictions for Real Estate in 2014

Well now, we've all seen some major improvements in the overall health of the nationwide real estate market, and Zillow's predictions (for the most part) can be backed up here in Ohio if sales and price statistic trends on local Ohio MLS databases indicate what we can expect for the future. Based on projections for unemployment rates, population growth and the home values via the Zillow Home Value Forecast, Zillow predicts the following metros will have the hottest housing markets in 2014 (in order): Salt Lake City; Seattle; Austin, Texas; San Jose, Calif.; Miami; Raleigh, N.C.; Jacksonville, Fla.; San Diego; Portland, Ore.; and Boston. They obviously haven't noticed what's happening here in Ohio.

Hot for who? Zillow's E-commerce selling advertising to agents at a premium (even though their site is full of inaccurate and outdated information). Hot for buyers and sellers, or hot for agents? Your best bet is a competent licensed Realtor, a professional buyers agent or listing agent with experience and insight in the local market your buying or selling in.

  • Zillow Chief Economist Stan Humphries says that the more modest home value growth he predicts for 2014 reflects a more mature, stable market that will exist a year from now. “(In 2014), home value gains will slow down significantly because of higher mortgage rates, more expensive home prices, and more supply created by fewer underwater homeowners and more new construction,” Humphries said in a statement.
  • As the housing market resets toward more sustainable, realistic lending standards and home value appreciation expectations, Humphries expects home ownership to drop to below 65 percent, a level it hasn’t seen since the mid-1990s.
  • U.S. home values will increase by 3 percent; mortgage rates will crack 5 percent; borrowers will have easier access to a mortgage; and the homeownership rate will drop to its lowest level in 20 years.
  • Even though Zillow predicts mortgage rates will rise to above 5 percent by the end of 2014, the competition for fewer borrowers will force lenders to ease their standards, said Erin Lantz, Zillow’s director of mortgages. Home affordability will remain high, too, in many markets despite the rate increase, she said.
All that being said, one thing I think Mr. Humphries failed to take into account, is that home prices are increasing faster than average income growth. Even if lenders ease their credit restrictions, will they ease the income to debt ratios and income standards? There will still be fewer qualified buyers even if lenders ease some restrictions due to the increased gap between sales price and income levels of buyers. Some buyers that are "borderline" stand to benefit, however, progress is always good, and overall the Nation (and Ohio) are currently moving in a positive direction. If you intend on buying, buy now if you can.

 

If you're buying or selling in the Greater Dayton Metro Area, I'd love to put my expertise to work for you!

Call me: 937-581-5656, or email me.

2 Responses to "Bold 2o14 Predictions From Zillow"

Liz wrote: JoAnn, had to say, I've been bugging my husband about buying for over a year now, and had him read this info you shared. It seems true, income isn't going up as fast as home prices in our area. After he read this we had a long talk and now ready to move forward this spring. We'd like to buy around Springboro or Lebanon.

Posted on Tuesday, December 10th, 2013 at 7:36am.

Juanita Limes wrote: Great post JoAnn,

I totally agree, and watching the market and economy closely. I believe Ohio real estate is headed in a very positive and sustainable direction, but concerned about jobs, pay-raises and potential layoffs in some areas. Great info!

Posted on Tuesday, December 10th, 2013 at 8:37am.

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