The outlook for real estate in 2015 continues to be very positive. Here are some of the key drivers and predictions for the year.
- There are no unusual patterns like the abnormally high number of investors and REOs in 2013 when comparing year-to-year results. This makes the normal metrics more valid.
- We expect to see closed units up approximately 5-7% in 2015.
- The interior markets and key suburbs had very low desirable inventory in 2014. This resulted in many multiple offer scenarios and prices rising faster than the overall market. We expect to continue to see this pattern in 2015. There is still strong demand for homes in these areas and no significant new supply of inventory. New homes cannot build fast enough to offset this imbalance. This includes areas like Midtown, Buckhead, Dunwoody, Sandy Springs, East Cobb plus Fayetteville and Peachtree City.
- We expect to see the demand increase for the next tier of suburbs including areas like West Cobb, Roswell, Milton, Alpharetta, Forsyth County, Gwinnett County, Hall County, Henry County and Coweta. More new homes are coming online in these areas and that will help drive up values.
- Major corporate moves from companies like Porsche, NCR, State Farm and the big announcement from Mercedes will drive demand in some of these key areas.
- New loan options with lower down payments and more credit flexibility will increase purchases from First Time Buyers. That has historically been the largest buyer segment in Atlanta but has slowed in the last few years.
- Baby boomers will continue to drive the largest segment of closings. Moving to smarter living options and multi-generational are the popular trends.
- New homes will continue to grow from around 18,000 closing to 22,000 closings. The cost to build is higher and this will help lift the values for the whole market including resales.
- Mortgage rates will be increasing in 2015. The early part of the year will continue to see very low rates but this will not last. The Fed has announced the end of quantitative easing and the economy continues to gain momentum. Industry analysts, Freddie Mac and the Mortgage Bankers Association all predict mortgage rates over 5% this year and growing back to the more normal 6-8% range in the next few years. This has a tremendous impact of buying power so the time to act is now!