Sanibel real estate blog: NAR makes economic predictions

And the latest word from NAR (NATIONAL ASSOCIATION OF REALTORS) at a Realtors Conference and Expo last Friday:  Price gains to drive housing growth.  The dollar volume of home sales will rise modestly next year, but that growth will stem entirely from increased home prices. This is according to NAR Chief Economist Lawrence Yun.

He continued with:tight underwriting by lenders( yes we have experienced that!),  low inventories in many markets (yes, that too!) and rising interest rates hold back growth in sales volume, said Yun. He predicted home sales of about 5.12 million for 2014 – virtually the same level forecast for this year. OK, we will take that – as long as we don”t start going the other way. He also continued to say home prices overall will rise 6%. Now, that doesn’t mean your home or condo specifically, just generally and on average.

IN more general economic terms, Mr. Yun says growth will likely remain sluggish. He doesn’t see any signs of a return to recession, but neither does he see anything that would boost growth beyond the 1 to 2 percent that’s been the case during the recovery. Economists consider a minimum healthy growth rate to be 3 percent.

He went on to report that the U.S. needs to spur stronger growth in the housing market by increasing inventory through stepped-up new construction – and only more new homes will ease tight inventories and help slow home price gains. Last year, only about 900,000 homes were started, a 50-year low and half the amount that’s needed, Yun said.

We don’t have many new home starts in Sanibel real estate, but there are several new home areas in Summerlin Corridor and that is Kimberley’s real estate specialty. Please give Kimberley Andrews, RE/MAX of the Islands , 239-935-9235 a call if you would like to know more about new home developments near Sanibel real estate. OR check out our website for area listings at www.chuckandrews.com

 

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