Last week I attended the Collin County Association of Realtors 2013 real estate forecast seminar held in Plano at the Plano Convention an Visitors Bureau.
They pulled a big dog in to talk so I could not miss this one. Lawrence Yun, the Chief Economist for the National Association of Realtors was slated to be the first speaker. Here are his highlights for both the nation and local economy for real estate.
He started by stating that Dallas is the “bright spot” in the nation for real estate in the country!!! This is because of affordability, job growth and demand. He also mentioned that comparing the trends of all cities only Phoenix has had a bigger upswing in prices and development but Dallas was very close behind.
He went on to give 3 Major Forecasts with his 15+ years of evaluating the real estate market and what he sees to come.
#1. Higher Inflation in 2015
There are no signs of an increase in inflation for 2013.
In 2015, he sees 4-6% inflation due to a couple factors.
The FED prefers a 2% max on inflation yearly. Lately we have been close to 0 for a while. The key factor is housing and housing has been doing very well the last couple of quarters. Also, the FED is allowing banks and financial institutions to borrow for 0% (from 2009 until 2015). The government has printed way too much money and has not slowed down. And lastly, the government spending vs. revenue is at a huge budget deficit and be prepared to a fiscal cliff 2,3,4,5 etc.
“He feels that the bottoming of the mortgage rates is RIGHT NOW!!!”
And he says that the rate in 2015 should be 5.5%.
#2. Higher Home Prices
The obvious, demand is up and supply is down.
“He sees a 15% increase in value (price appreciation) in the next 3 years!
Collin County Stats
Sales up 30% from November 2012!
Prices up 7% since November 2012!
Inventory down 22% in last year.
The reasoning behind this is the US adds 3 million people a year. Those people need a place to live. So both ownership and rental units increase. Unemployment is down and jobs are up. 8 year low in shadow inventory down to 15%!!!!
ALL THAT MAKES ME SMILE!!!
#3. More Unequal Wealth
This one was confusing to me but he said that since since the rich are getting richer, there is a higher demand in renters than home ownership. So this will drive up the renter market for the next couple of years.
In conclusion he said the interest rates should be at 4.1% by the end of 2013 and at 4.8% by the end of 2014.
So when do you want to buy, now at 3.25% or in 2015 when the rates are at 5.5%?!?
Call me today at (469) 733-2723 to learn about the hottest new home communities of Richwoods, Lawler Park and Phillips Creek Ranch in Frisco.
And don’t forget to ask me about my 4% Total Rebate for my clients.
Brad Holden – Holden New Homes – Licensed Texas Real Estate Broker