2014 Real Estate Forecast

Monday, January 06 at 11:20 AM
Category: Personal Finance

This year could be a good one for both buyers and sellers in the real estate market, according to industry observers.

Clear Capital, a provider of real estate data and analysis used by Kiplinger’s publications, reported home prices over the past year increased in 225 of the 276 cities it tracks. The median price for existing homes was up 10.9 percent, or $30,000, bumping the nationwide median price to $215,000.

Prices are expected to continue to rise in 2014, though at a slower rate. Clear Capital predicts an increase between 3 percent and 5 percent.

National Association of Realtors chief economist Lawrence Yun, meanwhile, predicted late last year an increase of 6 percent. That’s good news for sellers.

Despite the recent and projected upticks in pricing, however, homes remain affordable in most markets. According to Clear Capital, prices remain 31.5 percent below their 2006 peak.

As a result, The Conference Board, an independent business membership and research association, found recently the percentage of consumers intending to buy a home in the next six months was the highest since 2000. Much of that demand could come from young people who have put off buying a home due to a lack of employment or insufficient income.

Interest rates are expected to climb, too, with Yun predicting a rate of 5.4 percent by the end of 2014. Money magazine also predicts rates to go higher than 5 percent.

One thing to remember, however, is that while national numbers provide a general snapshot, prices, inventory and other factors depend on local market conditions. Arvest markets, according to data compiled by Clear Capital, are a good example of that.

The median sale price over the last year in the Little Rock-North Little Rock market, for example, was $177,000. That represented a 2.5 percent drop from the previous year and 5.8 percent since mid-2006.

The median sale price in the Fayetteville-Springdale-Rogers market, meanwhile, was $160,000. That reflected a 12.3 percent year-over-year increase, but still a drop of 22.6 percent since mid-2006.

Greater Kansas City’s $117,000 median sale price was a year-over-year increase of 3.7 percent, while Oklahoma City’s $152,250 median price was an increase of 2.2 percent. Tulsa, on the other hand, saw a 1.5 percent decrease to a median price of $124,700.

Those numbers reinforce why Virginia agent Rob Wittman suggested in a Money article the best bet is sticking with local lenders with ties to nearby appraisers.

At Arvest, which originated more than $2 billion in mortgage loans in 2013, we service 99 percent of our mortgage loans. That means customers make their payments to Arvest and deal with Arvest for any needs after their loan closes.

“At Arvest we recognize that homebuyers are looking for local lenders who will focus on customer service after the loan is originated,” said Arvest Mortgage Company President and COO Steven Plaisance. “That personal level of service is our number one priority.”

Tags: Arkansas, Financial Education, Home Loans, Kansas, Missouri, Mortgage, Oklahoma
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