For the property owner, these are what we believe to be the driving forces behind decisions and should be considered in a localized basis in real estate decisions in your area:
- Consensus on Overall Economic Recovery – While there are still concerns, the majority of economists agree that even though it may be at a slower pace, the U.S. is into recovery. The primary impact of this is that the balance of national news is now weighted towards a more positive tone which has profound impact on consumer confidence and behavior.
- Historic Low Interest Rates – Housing affordability is excellent.
- Retail Sales – Homes, autos, and overall retail sales are up and increasing, albeit slowly. Consumer spending positively affects tax collection and therefore overall economic health of communities.
- Residential Construction – Construction of new homes is increasing but may not meet demand in some areas. Buyers returning to the market are seeking selection and low inventory is generating demand in the new home sector which in turn fuels job creation in construction.
- Employment – Increases in Americans getting back to work will continue to be the primary force behind recovery. Though less than desired, we are adding jobs and moving forward.
- Pent Up Demand – The Great Recession has left us with over five years of demand that will percolate back to the market. Economic constriction created many consolidated, multi-generational households that are now dissolving. Some people with the capability to buy have been unable to secure a reasonable mortgage, particularly in more challenging sectors such as condominiums and luxury homes. Move-up purchases have been delayed pending “better days” and are now being contemplated.
- Job Security – Americans are less fearful of losing their jobs. Since 2007, this has been a stressful force in our home-purchasing decision process.
- Price Confidence – People in most areas of the U.S. are significantly more confident that the value of their home or one they might purchase will not fall. Indeed, headlines from many areas tout significant increases.
If you are considering a sale or purchase of residential real estate, you should discuss how these factors are playing out in your community, neighborhood and product type so that you have an accurate idea of what to expect.
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