The Good, the Bad, & the Wobbly

WHAT REAL ESTATE AGENTS SHOULD EXPECT

FROM THE HOUSING MARKET IN 2015

THE GOOD

US

EU

Japan

China

The U.S. Economy Is Strong

3.1%

5.6

1.3%

0.8%

7.1%

%With the lowest national unemployment rate in 6 years, optimism in the economy will be strong.

With a growth rate far above most other large economies, home-buyers will remain optimistic throughout 2015. While China’s growth rate will be higher than most, it will also be at its lowest in 15 years.

Sensitive geopolitical factors outside the U.S. will also make the dollar an attractive currency. This will help lending rates generally and stabalize fears of depreciation investment returns for home-buyers.

The Economy Is Turning Around Simply put, optimism is on the menu in 2015 as unemployment is reaching its lowest point in half a decade. Additionally, geopolitical considerations indicate a strong dollar for the foreseeable future. When the economy is strong, the housing market tends to mimic it!

88%

69%

vs. 2001

2014In 2014, 88% of buyers purchased their home through a real estate agent or broker, up from 69% in 2001.

Home-buyers StillTrust Great Realtors

Homebuyers Trust Great RealtorsEven with all of the wonderful information on the internet, nothing can replace what great realtors do. Homebuyers may be more informed by online sources, but that doesn’t change the trust they put in real estate professionals. Buying a home through a real estate agent is on the rise!

Home Sales Will Grow New Home Sales

19% 15%

Existing Home Sales

vs. 2014

+4%

-2%

2015

+8%

+25%

Expect the investors who fueled the earliest yearsof the recovery to start moving out of the market, freeing up housing stock for other purchasers inmany overheated markets.

4% FEWER INVESTOR PURCHASES

THE BAD

Affordability Will Decrease

+5% Home Prices

+5% Mortgage Rate

Decrease in Affordability -5%-10%

3%By some estimates, homes are currently 3% undervalued. This leaves little room before homes start to become overvalued. The question will then haunt some home-buyers: will the market overheat again?

Buyers Will Become More Educated

of buyersstarted their housing search online

43%

12%

50%of buyers usea mobile website or applicationto search

The days of realtors controlling the conversation are long gone. Expect buyers to become increasingly knowledgeable and demanding about what houses and neighborhoods they want to shop.

33%

While income has stalled, student debt has tripled in the last decade.

3xOf that student debt,11% is currently delinquent

11%

THE WOBBLY

Growth Will Be Dependent on Millennials & First-Time

Buyers

60%

40%

34%

32%

credit

rising cost ofhousing

student loans

home selection

Issues Cited by First-Time Buyers in 2014

Technology Will Create an Increasingly Competitive

Environment

Technology Is A Game-ChangerReal estate agents will have to stay on their toes to better serve well-informed buyers. Fortunately, many buyers still turn to real estate agents for reliable information and guidance in the housing market. Although technology can make client acquisition more competitive for real estate professionals, it also provides an opportunity for agents to reach buyers online.

Housing Trends Will Continueto Move Away From Single

Family and Non-Luxury Homes

Builders Shifting To Multi-Family And Commercial Properties

Although single-family homes will always have a place in the market, builders are shifting their focus towards multi-family and commercial properties. This may create a crunch on the demand for single-family homes in the future.